VENTURE STORES MAKES ITS PITCH
Byline: Mark Tosh
NEW YORK — It’s a risky scheme, but Venture Stores is fully behind it.
The troubled discounter is on a course to upgrade its apparel presentation to a new level, between discount and department stores, and is seeking support from vendors.
Venture’s 1996 repositioning strategy was detailed last week to about 275 vendor executives at a meeting near its O’Fallon, Mo., headquarters.
“If they accomplish what they showed us, they’re going to have one of the best looking mass merchant stores out there, based on fixturing, presentation and the overall emphasis on apparel,” said Robert F. Luehrs, president of Chic/HIS jeans. “Nobody will look better than Venture will look, outside of possibly Target, and I’m not sure about Target looking better when it comes to apparel.”
The repositioning is “way bigger than I anticipated,” said Tom Weeks, vice president of marketing at Cherokee. “It’s a tremendous upgrade from where they were before. They are going to four-way racks and tables for product to be folded in. It’s really well-thought out displays.”
In addition to upgrading fixtures, Venture will create several in-store shops for key apparel and home categories. The chain also is negotiating with new vendors such as Tracy Evans sportswear, Michael Stevens handbags and Cherokee.
Weeks said Cherokee was hoping to close a deal with Venture before Christmas to supply the chain next year, but declined to comment on what categories are involved. Cherokee — a licenser, not a manufacturer — signed an exclusive deal with Target beginning in fall 1996 for women’s five-pocket jeans, accessories and women’s shoes.
Venture will begin overhauling its stores immediately after Christmas in an effort to differentiate itself from Wal-Mart and other discounters. It expects to spend $40 million on the repositioning, which includes building in-store shops for key apparel categories and selling more upscale merchandise.
“Everything we hear is that [vendors] believe the direction we’re heading — between discount and department stores — is a viable niche,” said Cliff Campeau, Venture’s senior vice president of marketing. “The question is, can we execute it — and we believe we can.”
As reported, in the third quarter Venture lost $13.2 million including non-recurring charges of $3.3 million related to the repositioning. Sales were down 4.1 percent to $444.6 million.
Luehrs said the three-hour Venture meeting was “one of the smartest presentations I’ve ever seen.” He said Venture executives put the “good news, bad news and in-between out on the table.”
“I don’t mean that they’re necessarily going to be successful with what they’re doing, but they were terrifically focused,” Luehrs added. “Every single bit of information that you could want, you received from them.”
Other troubled retail chains, such as Kmart, have been more reticent about revealing their plans, and consequently they have lost some support. Another key to Venture’s turnaround, according to Luehrs, is whether the apparel business rebounds. Venture wants to increase the selling area for apparel to about 40 percent of floor space next year from 33 to 35 percent. Venture will add a petites’ department and expand large sizes and foundation businesses.
“If the apparel business continues to decline, it could be tough for Venture,” Luehrs noted. “But they could benefit greatly if apparel turns around, because they should look like a star when it comes to presentation.”
Luehrs said Venture expects sales and profits will remain under pressure until the new format gets up and running in March. He said Chic has a “sizable business” with Venture and expects it to grow as Venture increases apparel floor space.
Still, Luehrs said, there are some questions about whether Venture can use low prices to “draw people in with apparel the way other stores draw people in with toothpaste.” Currently, Venture seems desperate. With Christmas less than a week away, the chain has rolled out new promotions and extended store hours while hustling to sell the repositioning plan.
Venture kicked off a series of promotions last week to capture last-minute sales, which are trailing year-ago results. The chain’s stores will be open 24 hours a day beginning 8 a.m. Thursday until 6 p.m. Sunday.
Additionally, since last Thursday one in every 100 shoppers checking out merchandise has been getting the entire purchase free. One woman walked away with $1,100 worth of goods, according to Campeau.
“Since everybody is trying to do business on a percentage-off basis, it becomes a sea of discounts in the last few days before Christmas,” he said. “I think this ‘Free-for-All’ promotion is getting us noticed.”
Campeau said Venture expects four to six people per hour will get their purchases free. Average tickets in December are about $50.
Campeau said sales trends at Venture had “not been that good, going into the holiday season,” which he attributed to the chain’s effort to get out of some non-productive hardline categories. He said the chain had planned to layer in promotions over the latter part of the month.
“At this juncture we’re on plan with our expectations,” he said. “Our store-for-store inventories are in good shape.”
Campeau also said Venture was pleased with vendors’ reaction to last week’s repositioning presentation. The suppliers represented at the meeting account for about 70 percent of Venture’s $2 billion volume.
“The important thing is that we invited them in a spirit of partnership,” he said. “They were a little surprised we are as committed and buttoned up on this.”