GOODY’S GOAL: CATEGORY KILLER
Byline: GEORGIA LEE
KNOXVILLE, Tenn. — A new management team has come up with an aggressive growth plan to make Goody’s Family Clothing a category killer in moderate-price casual clothing.
“We want to do for apparel what Toys ‘R’ Us and Home Depot have done in those areas,” said George Rubin, executive vice president of merchandising, who recently joined Goody’s as one of 12 new vice presidents who have been hired since March 1993.
The company has worked extensively with outside research specialists to devise “Goody’s 2000,” a growth plan to take the company into the next century.
The five-year plan includes adding 265 stores to Goody’s current 153, and projected sales increases of 20 percent per year. That pace should bring annual volume up to just under $2 billion by the year 2000.
Goody’s has been on a fast track for the past decade. Founded in Athens, Tenn., in 1953, the company has grown over the last 10 years from a $32 million regional retailer with 39 stores to a $500 million company with stores in 13 states.
Goody’s traditionally has targeted rural areas and small towns with moderate-income populations. During the past year, however, the chain has tested metropolitan markets, opening four stores in Birmingham, Ala.
Averaging $200 per square foot, according to industry analysts, the stores have been so successful that Goody’s plans a major push into more urban areas during the next few years.
Goody’s offers apparel for women, men and children, with women’s comprising 40 percent of total sales. Prices have been lowered 15 to 20 percent over the past four months, and sales promotions lop off an additional 15 to 25 percent. At $5.99 to $40, prices are advertised at 15 to 30 percent lower than department stores.
“We were running higher prices, with promotions of between 30 and 50 percent off,” said Rubin. “We noticed that nothing was selling before sales, so we switched to lower everyday pricing.”
Denim, which accounts for 25 percent of business, is a primary draw, with such brands as Lee, Levi, Jordache, Rio and Chic, priced from $17.99 to $34.99. “Our customer base is built on denim,” said Rubin. “We put money and effort into the category, with in-store shops, strong presentation and by keeping up stock levels.”
In the past year, the denim push has included quick response partnership programs with Lee and Levi’s. Last year, Goody’s hired John Thompson, formerly head of MIS and distribution at Lee Apparel, as executive vice president of business systems and logistics, with the goal of implementing a quick-response program.
EDI technology and automatic replenishment systems have been put in place over the past year and have resulted in some dramatic improvements. For example, by tracking size and color assortments, Levi’s in-stock levels improved to 95 percent from 65 percent in the first four weeks, and sales increased 30 percent.
“We’ve gone from monthly to weekly reorders, and increased turns and margins,” said Thompson.
Though restricted to jeans so far, Goody’s is now establishing such partnerships with Lovable, Bestform and Hanes, and hopes to add 25 to 35 vendor-partners by the end of the year.
Technology has also improved merchandise flow. Goody’s expanded its distribution center by 125,000 square feet to 350,000 square feet, and cut its order-to-warehouse time to seven days, from between 14 and 21 days, said Thompson.
Rubin defines Goody’s clientele as “a mainstream customer who wants quality, the same brand-name fashion she sees at Limited or The Gap, but at a better price. We offer clothing that can be worn to casual workplaces, but no serious career wear.”
Alfred Dunner, which Rubin defines as “Liz Claiborne for the masses,” is Goody’s dressiest and highest-priced line, at around $40 retail.
Goody’s has restructured its juniors and misses’ mix to feature less novelty and more basics.
“With the aging population, misses’ has grown dramatically, while juniors has shrunk,” said Rubin.
“We’ve gotten out of sleazy junior looks that last 30 seconds, and into more mainstream looks, similar to The Gap and Banana Republic, which is what this customer wants now.”
Popular juniors lines include Palmetto, One Step Up, Duckhead and knits by Faded Glory. A sleeveless denim shirt by Kikimo sold 200,000 units in six months.
Misses’ has moved from conservative pull-on pants and tunic tops to more belted and pleated styles in better fabrics, like high-grade cottons and other natural fibers, as well as classic, basic separates. Sag Harbor and the Leslie Fay brand are bestsellers among approximately 50 women’s branded lines. A cotton T-shirt with a crest by Mishan has sold 300,000 units over the past six months.”We not concerned with an image for the store — we don’t dictate or preach about trends,” said Rubin. “We give the customer what she wants.”
Goody’s has been steadily upgrading its store presentation, culminating in a new prototype store recently opened in Chattanooga, Tenn., and the scheduled remodeling of many existing stores. Denim is the dominant focal point, surrounded by other departments. Wider aisles, dramatic lighting, signs with lifestyle photography and folded merchandise on tables and in recessed wall units, rather than a sea of racks, all contribute to a department store ambience.
According to Robert Goodfriend, chairman and chief executive officer, whose father started Goody’s, the new management and aggressive planning is starting to pay off at the bottom line, after a lackluster 1993.
Net sales for the 13 weeks ended April 30, 1994, increased 28.6 percent to $124.3 million, compared with net sales of $96.7 million for the first fiscal period last year, ended May 1, 1993. Earnings from operations for 1994’s first quarter increased 91.4 percent, to $5,076,000 from $2,652,000.
Analysts believe Goody’s goals are realistic.
“They now have the infrastructure and the new management that addresses all areas,” said Dan Wewer, senior vice president and retail analyst with Robinson Humphrey, citing its low cost structure, sharp prices and “an overwhelming denim assortment.”