AMES STEPS CLOSER TO NEW YORK
Byline: Faye Brookman
NORTH BRUNSWICK, N.J. — In this suburban market dominated by mass merchants, such as Kohl’s, Target and Wal-Mart, who are trying to take their merchandise assortments up a notch, another discounter is sneaking in and delivering value.
On Thursday, Ames Department Stores opened a 49,000-square-foot store in a strip shopping center here, just one mile from a Wal-Mart and about 10 miles from Target and Kohl’s. The debut here coincided with openings of four other Ames’ units, two in Illinois, one in Indiana and the fourth in Columbus, Ohio.
Ames’s goal is to court customers left behind as other mass merchants trade up. Target, for example, is pushing its trendy Mossimo brand while Wal-Mart has added name merchandise, such as Noritake. Some shoppers are feeling left behind, according to Joe Ettore, Ames’s chairman and chief executive officer, who believes those discounters want to curry the tastes of a more affluent consumer who cross shops department and mass stores. Ames is looking to keep the masses happy.
Located in a former Caldor site, the new Ames features the chain’s easy-to-shop layout that debuted five years ago in Pennsylvania. Although Ames, based in Rocky Hill, Conn., operates 16 units in New Jersey, this is the closest of its 452 stores to the metropolitan New York market. It is also one of the most densely populated areas of New Jersey and one heavily dotted with retailers.
Opening day festivities lured hundreds of local residents who stocked up on comforters priced under $12, sweaters priced at $4.94 and a melange of health and beauty care products at keen prices, such as Aim toothpaste at two for $1.
The opening even brought Ettore out for the ribbon cutting of the newest store in his home state. Ettore, a former executive with now defunct Jamesway, proudly touted Ames’ bargains. “As a New Jersey resident, I am personally very excited about the North Brunswick opening,” said Ettore. “Ames’s trademark Bargains by the Bagful and our A+ customer service simply can’t be beat.”
Ames’s timing is also fortuitous, as the company is getting well known in central New Jersey since it stepped up to accept returns from Bradlees, a now defunct mass merchant popular in this portion of The Garden State.
Health and beauty care and cosmetics are treated as convenience offerings by Ames, but that doesn’t mean the departments don’t get prime real estate near the entrance of the store. Aromatherapy, a relatively new category for Ames, is situated at the front of the store, near customer service. The products are primarily from a New York-based company called Jomar.
Behind aromatherapy is an impressive assortment of health and beauty care including vitamins, hair color, shampoo and hair accessories. Spokeswoman Mary McCabe said Ames “edits” the selection to make it a convenient shopping stop for its core customer — women 25 to 35. She added that Ames studies the local demographics of the market to help determine the mix.
Since females are the primary customer, cosmetics is a core category. The assortment is merchandised near the entrance of the store, just behind jewelry. The primary supplier is Maybelline, which is housed in a special fixture with a green and yellow awning. For the opening, all Maybelline merchandise was priced at 50 percent discounts. The other major beauty brand is Cover Girl.
Additionally, Ames has delved into the teenage beauty business with a significant presentation of brands such as Del Laboratories’ NYC and Bonne Bell’s Smackers. There’s also a display of youth-oriented products from Sel-Leb Marketing’s Loud Music, featuring glitter and edgy colors. “Our customers have an average of 2.5 kids, so having cosmetics for them is important,” said McCabe.
To round out the mix, Ames offers nail care from Sally Hansen, Kiss and Nailene. There is also a presence in ethnic cosmetics thanks to AM Cosmetics’ Black Radiance.
McCabe said 42 percent of company sales are rung up in the home areas, 29 percent in apparel and 29 percent in other categories. Beauty is a small chunk of sales — less than 2 percent. However, the category is growing in importance as Ames seeks to provide shoppers with a one-stop shopping environment.
Despite the new store opening schedule, Ames has had its share of financial setbacks. Its credit rating was cut last week by Standard & Poor’s. During that week, Ames reported a fourth-quarter net loss of $152 million, which was exacerbated by the staggering economy and costs associated with closing 32 former Hills stores. Reacting, Ettore said Ames has taken steps to bring its operating costs and cash flow requirements in line with the currently “difficult” economic environment. In fact, the stores opened Thursday are, most likely, the only new units Ames will open this year.