JAMESWAY’S SALVATION: SOFT GOODS
Byline: Sharon Edelson
NEW YORK — Jamesway is grappling with “the vision thing.”
Operating in bankruptcy since July 1993, Jamesway’s slide was precipitated in part by a lack of identity that hampered its ability to compete with larger, more powerful stores.
“Jamesway never really had a real point of difference from the competition,” said Bill Flatley, a principal of Walter K. Levy & Robert E. Kerson Associates. “It had no real personality. When competition like Wal-Mart rolled into town, [Jamesway] really got hurt.”
Herb Douglas, who assumed the post of chairman and chief executive officer on Sept. 1, has been trying to define the chain’s niche, while tending to the basic operational issues that had long been neglected.
Douglas, who was senior vice president of merchandising at Bradlees, said Jamesway should emerge from bankruptcy in January.
He is counting on soft goods to differentiate Jamesway from the pack and said the chain would be positioned as “a convenient regional discounter offering broad assortments of merchandise at value prices.”
“Everybody does that,” he conceded. “We have to do that too. The thing that makes us different is our proximity to the market and our size, which will allow us to respond quickly to consumers’ changing needs.
“We’re in the marketplace every week and if we see a trend, we jump on it,” he added. “We can move quicker than Kmart or Wal-Mart. We can get into key items where they can’t. The fashion will really help us to be different.”
Kurt Barnard, president of Barnard’s Retail Marketing Report, said Douglas might be underestimating Wal-Mart’s ability to respond quickly to trends.
“Wal-Mart’s logistical apparatus is unequal to that of any retailer in the U.S.,” he said. “If anyone can respond very quickly, it’s Wal-Mart.”
Other chains, including Bradlees, Caldor and Kmart have used fashion to attract customers and improve their gross margin. Recently, Wal-Mart announced it would actively seek name brand apparel lines. The retail giant had previously not concentrated its efforts in apparel.
Jamesway has tried to increase its apparel ratio before. In 1992, when soft goods accounted for 37.8 percent of sales, the company said it was targeting 45 percent by 1997.
But financial problems made it impossible for Jamesway to carry out the renovations that would have allowed it to expand its apparel departments. Soft goods subsequently slid to 32 percent of sales this year. Douglas said he hopes to increase it to 35 percent next year.
Industry analysts wondered whether apparel would be enough to turn the troubled chain around.
“I don’t think it’s enough,” Barnard said. “What are they going to do that makes them stand out head and shoulders above the competition?”
Douglas said Jamesway’s size allows it to buy opportunistically. The chain looks for small quantities of remainders and discontinued items that larger chains would bypass.
A special purchase program of apparel and hard goods has been instituted. Every week new special-purchase items bought through closeouts will be featured, offering savings of 30 to 60 percent.
Douglas said the restructured and reorganized company will have almost no debt and enough capital to remodel 25 of its 92 stores next year.
It has already remodeled six stores, the latest of which opened this month in Bradford, Pa., and Catskill, N.Y.
The remodeled stores feature more casual clothing, expanded women’s plus-size sections and new sports apparel shops for men.
A prototype was designed to increase the selling area in stores by utilizing empty space in the front and relocating customer service desks from the center to a side wall. Douglas estimated a pickup of at least 10 percent additional space.
“In the past, we had four power corners in the store,” Douglas said. “Now we’ll have five impact areas in hard lines and home fashions. These areas will be very powerful and will attract the customers with a visual look.”
Any future stores will be 70,000 to 80,000 square feet, with 40 percent of the space devoted to soft lines. Douglas said the company is still deciding whether to open any new stores in 1995.
While other discounters vie for new brands, Douglas said he isn’t looking for new vendors. He would like to do more business with the store’s current suppliers, which include Fruit of the Loom, Hanes and Wrangler.
“We want to build our business with key manufacturers, and we may have to use fewer manufacturers than the big guys so we can be important to them,” he said.
Douglas sees other areas of opportunity.
“We’d like to increase areas where customers are very loyal, like plus sizes,” he said. “In the intimate apparel department, we discovered we were giving too much space to sleepwear and robes and not enough to panties and bras. We’re going to explode the bra and panty business.”
Other immediate goals include improving productivity, increasing turnover and creating what Douglas calls “clean and simple stores.”
Jamesway currently does about $125 a square foot, which Douglas characterized as “below the poverty level.” In comparison, Bradlees and Caldor do about $200 per square foot.
Douglas said speeding turnover will help improve productivity, while allowing the chain to take fewer markdowns and use less of its $150 million credit line.
“We will spend $5 million on systems to get into the 21st century, which has been one of the problems,” Douglas said, referring to Quick Response.
“We have to flow goods in seasonally, coinciding with more holidays,” he added. “We also have to deal with our different store sizes. We don’t send the right amount of merchandise to the appropriate store.”
The chain’s stores are 40,000, 60,000 and 80,000 square feet.
Looking around the women’s apparel department at Jamesway’s Matawan, N.J., unit, Douglas said, “We have a lot of work to do. I don’t want the department to look like a clearance center. We’re going to clean up the stores to make it easier to shop. I come from Bradlees, which runs very disciplined stores. They’re sparkling.”