LOS ANGELES — Ross Stores plans to unveil a smaller, lower-priced concept next year to target lower-income households in urban and suburban strip shopping centers.
The new format, which has yet to be named, will be about 25,000 square feet in size, slightly smaller than average Ross stores, which are typically about 30,000 square feet. It will house brand-label merchandise at price points “measurably lower” than Ross’ average of $10, according to Katy Loughnot, vice president of investor relations for the Newark, Calif., off-pricer.
“We saw a customer niche we’re not serving,” she said.
The first of 10 initial stores is slated to open on the West Coast next July, Loughnot said. Locations and leases haven’t been finalized, but the new concept is expected to increase Ross’ planned square-footage growth in 2004 to 14 percent.
Eventually, the format has the potential to be “at least” 500 stores nationwide, said Loughnot, and would be run as a separate division.
The company currently operates 562 Ross Dress For Less units and generated sales of $3.53 billion in 2002.
Loughnot declined to reveal first-year sales projections for the concept, but one analyst said the new format could nearly double annual revenues.