JAMESWAY: ‘WE’RE READY TO GO’
Byline: Mark Tosh
NEW YORK — Fresh out of Chapter 11, Jamesway Corp. has begun taking aim at improving its store-level performance.
The regional discounter, based in Secaucus, N.J., emerged essentially debt-free Monday after 18 months of bankruptcy protection and has realigned and expanded its management structure and speeded up store-renovation projects.
The goal is to put more focus on individual store operations. As part of the plan, Jamesway expects to add two senior executives within the month and remodel 25 of its 90 stores this year in three phases.
“We’re really excited and we’re ready to go,” Herbert Douglas, president and chief executive officer, said in an interview this week.
Douglas said Jamesway came out of Chapter 11 with no long-term debt, more cash on hand than its reorganization plan stipulated, a “lot less inventory” than the plan called for and better terms from vendors. He declined to provide specific figures.
“This means that the vendor community is behind us, which is great, and we’re positioned to buy our sales and our markdowns,” he said.
In accordance with its reorganization plan, 12 million shares of new Jamesway common stock have been issued and will trade on the New York Stock Exchange.
The company’s most recent figures, for the nine months ended Oct. 29, show a loss of $10.9 million, compared with a loss of $18.6 million in the same period of 1993. Sales on a same-store basis rose 6 percent in the same nine-month period.
Douglas, who came to Jamesway in September from competitor Bradlees, said one of the goals he set for the company last year was to reduce inventory as a means of improving turnover.
“We put a full-court press on an inventory reduction program,” he said. “This drove inventory down. And because you’re selling inventory, it created cash flow.”
In the past, he said, Jamesway packed away unsold merchandise at the end of the season.
“We don’t do that any more,” he said. “We have taken the appropriate action early to get the goods down to the right price. We took more aggressive and earlier markdowns in apparel.”
Douglas declined to state the value of current inventory, but said it was at “a low low.”
For spring, Douglas said Jamesway’s sales plan calls for “modest” growth. (The retailer’s reorganization plan predicted same-store sales would rise about 2 percent in 1995. In the quarter ended Oct. 29, same-store sales rose 12 percent.) Douglas said Jamesway will boost spring inventory by using “a very small percentage” of its $115 million credit revolver, which has been established with the CIT Group.
At the same time, however, Jamesway will crank up its store-remodeling efforts. Five stores now being renovated should be completed by the end of March and another 20 stores are scheduled to be updated in two separate waves this year.
The first group of stores should be completed by Father’s Day and the second group is expected to be ready for the Christmas season. No new stores are currently planned, Douglas said, but the discounter is open to developing them in the near future.
Jamesway also expects to add within a couple of weeks an executive vice president to focus solely on improving stores and operations and a second regional manager to take over responsibility for half the store base.
Tom Kiley, the executive vice president who was responsible for merchandising, marketing, stores and operations, has relinquished the responsibility for the latter two functions. But Kiley adds oversight for the planning and control functions, which had been handled in the finance department, and will concentrate fully on sales-related activities.
Jamesway, which has stores in seven Northeastern and Mid-Atlantic states, already has candidates for the two new slots, Douglas said. A third new position that will be filled is divisional merchandise manager for home furnishings.
By adding a second regional vice president, Jamesway hopes to make its stores more “convenient,” Douglas said.
“In order to be a convenient store, you have to be neat, clean and orderly,” he said. “You have to be in-stock and be presented properly. So we’ve got to pay more attention to our stores and I think that’s the way we’re going to do it.”
In other personnel moves, Jamesway promoted five executives: John Sipala, from vice president and controller to senior vice president, finance; Kevin Frain, from assistant vice president, cash manager to vice president and treasurer; Tom Ormsby, from assistant vice president and director of strategic planning to vice president, planning and control; Robert Saraceni, from assistant to the controller to assistant controller, and Steven Mastropietro, from director of budget and accounting to assistant controller.
As part of the management realignment, Bob Greenwald, senior vice president and general merchandise manager of softlines, and Randy Solomon, senior vice president and director of store operations, have left the firm. Greenwald had been responsible for men’s wear. Jamesway also has spent “significant dollars” on new fixturing for all of its stores, Douglas said.
In stores that have been or will be remodeled, soft lines receive about 40 percent of the selling area. One difference is that the stores have “impact walls to do [merchandising] stories,” including denim and fleece shops, and new cube-shaped display cases, Douglas said.
Jamesway will add a visual merchandising executive to its planogram department to oversee soft-line presentations.
Additionally, the intimate apparel department has been reconfigured to give foundations more space, and Jamesway is trying to strengthen its merchandise in the accessories area, Douglas said.
“We’ve got a lot of stuff that we’re working on,” he said. “The key thing is we have to make it happen.”