BRADLEES HEAD: WE ALMOST HAVE OUR MERCHANDISING PLAN READY
Byline: Mark Tosh
NEW YORK — After paring some categories, beefing up others — like apparel — and improving in-stock position, Bradlees is far along in its effort to develop a merchandising plan that will allow it to emerge successfully from Chapter 11, Mark Cohen, chairman and chief executive officer, said Tuesday.
Speaking at the National Retail Federation annual convention here, Cohen said, “I don’t think we have it nailed, but I think we’re well along on a program.”
Cohen said Bradlees, a 136-store discount chain, has evaluated all aspects of its business since filing for Chapter 11 on June 23. He said “too many retailers” rush out of bankruptcy without addressing the fundamental problems and end up back in Chapter 11. “We’ve been studying the reasons we failed intently as a means of developing a plan that is going to get us out [of Chapter 11] successfully,” he said.
Cohen was a panelist at an NRF workshop entitled “Does Merchant Prince Still Equal CEO?” He did not address Caldor Corp.’s two proposals to Bradlees last year that the discount chains merge to improve their competitive position.
However, he conceded that his biggest challenge is managing the turnaround while the company is “held in the grip of shareholders and creditors whose raison d’etre may be to enhance the profitability of their very recent investment in our company as a distressed property.”
“It’s no secret that Chapter 11 has become an increasingly attractive arena for merger and acquisition activities,” he added. “The irony of the federal bankruptcy codes is that they do not distinguish in any way the classic creditor from the financial trader who buys a claim and who has no beneficial interest in the company other than as a vehicle for a quick turn on their money.”
Still, Cohen said he believes Bradlees can be turned around. The discounter reported an operating loss of $49.8 million in the second quarter.
“I spend a lot of my time operating under a banner of, for lack of a better word, belief,” he said. “Employees, from sales associates to senior executives, must share that belief and suppliers must share that belief.”
Among the recent merchandising changes, Bradlees has dropped unproductive goods like detergent, pool chemicals, grass seed and fertilizer, Cohen said, while beefing up apparel, especially dresses, denim and intimate goods.
Bradlees achieved a 53 percent increase in dresses in the fourth quarter and intimate apparel was up 14 percent in the second half, he said, noting that in the past the company was known for its strong apparel assortment but let the business slip away. Men’s wear and denim and denim-related merchandise also are improving, Cohen said.
“It’s purely a reflection of our competence level,” he said.
Cohen also said a corporate structure that includes a “reality-based merchant prince operating in tandem with an accomplished financial partner” could be the ideal solution to handling pressure from the investment community while tailoring assortments to match customer demand.
Herbert Mines, chairman and ceo of the search firm Herbert Mines Associates Inc., said at the workshop that today ceo’s increasingly are coming from the administrative side of the retail business, rather than from merchandising.
“Historically, the men and women who held ceo positions in retailing grew up through the merchandising and marketing ranks and were viewed as the merchant prince or princess,” he said. “But the coming trend sees executives with administrative skills being elected as ceo. A partnership between merchant and administrator is imperative.”