MILWAUKEE -- A leaner and more fit Carson Pirie Scott emerged from Chapter 11 last November. But by several measures, the firm is still in the doldrums.
Even its president and chief executive officer, Stanton Bluestone, admitted that to catch up to the competition, "We need to grow a little faster than the industry." He cited the chain's overall sales-per-square foot at $130 as well under the industry average of $167. However, in a recent interview at Carson's headquarters here he spelled out the corporate strategy designed to lift the figures. The program includes:
More focused merchandising, including an emphasis on moderate-to better career apparel.
Narrowing vendors and assortments.
Renovating stores .
Taking a less promotional approach to marketing.
The strategy appears to be working. Carson's comparable-store sales growth averaged 4.8 percent from October 1993 though July, with apparel recording double-digit increases. Sales at remodeled stores grew almost twice as fast, by 9.4 percent for the first half of this year. In 1992, comparable-store sales were off 0.5 percent, and for the first half of 1993, they were flat.
Bluestone was president of Carson's, formerly called P.A. Bergner, when the retailer went into Chapter 11 in 1991. He was charged with steering the company through the bankruptcy as the board searched for a ceo to succeed Alan Anderson, who resigned before the firm went under.
The board recruited Arthur Martinez, then a Saks Fifth Avenue vice chairman to become ceo, but he threw them over to become chairman of the Sears Merchandise Group. Carson's filed a lawsuit, which was settled, and then determined that the best man for the job was in their own backyard, promoting Bluestone from acting ceo to ceo in August 1993.
Carson's operates 37 Carson Pirie Scott stores in the Chicago area, Indiana and Minnesota, 13 P.A. Bergner stores in downstate Illinois and Wisconsin and 10 Boston Stores in Wisconsin. The chain reported 1993 sales of $1.15 billion. Overall, women's apparel accounts for 30 percent of the total business, Bluestone said.
Carson's pattern is typical of companies emerging from bankruptcy. "The first two years after you exit bankruptcy is a honeymoon period because you get rid of the bad stuff and emerge with the good stuff," said Sidney Doolittle, a retail consultant with Chicago-based McMillan and Doolittle. "Then, competitive realities begin to set in and by the third year you're struggling to maintain market share," he added.According to Dean Ramos, an analyst with Dain Bosworth, Minneapolis, Carson's will find it harder to repeat its strong figures for the second half of the year because it will be up against tougher comparisons. But if the company maintains its merchandising strategy and its program of renovations, he expects it to do well.
In Carson's case, it was able to shed its 10 least-productive stores, but those it has kept aren't in top-performing malls. Its local competitor, Marshall Field's, has a foothold.
Bluestone contended this is not a problem.
"We're not in the top centers, but we're near them or we surround them," he said. For example, he noted that Carson's is not in Old Orchard, an upscale mall serving Chicago's North Shore suburbs, which is anchored by Field's, Lord & Taylor, Saks and a soon-to-be-opened Nordstrom. However, he said Carson's does have a store in Eden's Plaza, less than a mile away and very close to the expressway.
He also noted that with 27 stores in the Chicago area, Carson's has almost twice as many units as Field's or J.C. Penney, with 15 each.
"Convenience is a major plus," Bluestone said.
Under Carson's new merchandising plan, the company streamlined its vendors and assortments, which had become bloated after Bergner bought Carson's in 1989.
"There was no focus because we were buying a little bit of everything from everybody," said John Freudenthal, executive vice president of merchandising.
"We cut out about 30 percent of our vendors and strengthened our partnerships with those we did business with," Bluestone said. For example, in its junior denim area, Carson's trimmed the number of vendors from 18 to five.
The chain also decided to focus on career customers, whether they're corporate executives or office clerks. Carson's "wear to work" category now accounts for 60 percent of misses' sportswear.
The profile of Carson's typical customer is 40 years old with an average income of $50,000. About 70 percent of Carson's female customers work and 60 percent of its entire clientele come from dual-income households.
The company also realigned buying responsibilities. Career and casual apparel from the same vendor are now bought by different people, which has helped eliminate some duplication, Bluestone said.Top vendors at Carson's include Liz Claiborne, Norton McNaughton, Jones New York, Carole Little and JH Collectibles. Other strong names are Levi's, Lee, Alfred Dunner, Chaus and Koret.
The store also plans to build its private-label business to 15 percent from 10 percent of the overall mix in the next three to five years, Bluestone said. He expects the fastest private-label growth in moderate sportswear.
The trend toward more casual dressing for the office is addressed, with assortments and displays showing customers how to put together casual work looks.
The highest-growth areas in apparel have been active and casual wear, juniors and special sizes.
Special sizes, which account for 22 percent of the total sportswear business, have been expanded in every store, Bluestone said. In new or remodeled stores, 4 to 5 percent of total selling space is devoted to special sizes, about twice the previous allotment.
"Every time we expand the petites department, the business grows beyond our expectation," said Bluestone.
He noted it's not all incremental business, since many petites customers used to shop the juniors department.
Among other moves, Carson's shifted its Certified Value program into high gear. The program uses signs to identify items with particularly strong value. About 200 items, mainly women's, men's and children's apparel, are in the program. They account for about 7 percent of total business, compared to 4 percent in 1991, Freudenthal said.
For fall, Certified Value merchandise will include a private-label cotton turtleneck at $14.96, a private-label leather coat at $229.96 and a Casablanca wool blazer at $49.96.
Carson's has also improved merchandise flow into the stores, to serve customers who buy closer to need. Before, fall goods generally hit the floors by July and August and would sit until November, Freudenthal said, often requiring big markdowns to move it.
In addition, in 1992, the chain embarked on a five-year, $200 million plan to remodel 40 stores. Nine are done and 11 are in progress.
The retailer also invested $10 million in training and hiring more staff, Bluestone said. To reduce staff turnover, Carson's launched a profit-sharing program called Partners Earn Profits, which enables every employee to share in the profits of stores that exceed plan. In the first quarter of the program's operation this year, half the stores received a payout.In July, Carson's completed a rollout of new point-of-sale systems to all stores, which have made transactions faster and more efficient, Bluestone said.
A new, less promotional approach to marketing is another goal of Carson's strategic plan. During 1992 and 1993, Carson's reduced the number of sale days by 30, or 12 percent. For example, it shortened sales events like "Carson's Days" from 14 days to seven or eight days.
"It gives more credibility to everyday pricing and shows us as more than just a store that's on sale," Bluestone said.
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