Stage Stores and its family of fashion retailers, including Bealls, Goody’s, Palais Royal and Peebles, got their start in the industry guided by the idea that no market is too small to warrant their attention. In recent years, the company has found that there is also no market too big.
“In our history, we have typically targeted stores that have a population of less than 50,000 within a 10-mile radius,” Executive Vice President of Stores Russ Lundy explains. “These are smaller towns that are underserved by retailers or have maybe one or two other competitors in the market. We’re one of the few retailers able to bring a department store with national brands to towns with our smaller footprints. Our average store size is around 18,000 square feet.”
Though the less-than-50,000 crowd has been its industry niche for quite some time, the company has entered a few larger markets and with great success, Lundy says. Of the 40 new stores and 10 relocated stores planned to open next year, Lundy says five or 10 will be located in larger metro areas. It is also expanding Steele’s, the company’s off-priced division which launched in 2011. The retailer offers brand-name merchandise for up to 70 percent off department store prices.
“In our quest to continue to grow, we are starting to look at other stores in metro areas with 50,000 to 150,000 people, and in a few cases, 150,000 or greater,” Lundy affirms. “As we’ve strengthened our brands with a greater depth of product, our larger markets are performing as well as if not better than the smaller markets. So we see growth potential in the larger markets as well as potential in our niche with smaller markets.”
Stage Stores currently operates 849 department stores spread across its six major banners. In 2013 alone, the company opened 28 more stores with a concentration on filling in existing markets. Stage Stores is found in 40 states and certain regions are well blanketed, such as the states of Louisiana and Oklahoma, as well as Texas, where the company is headquartered.
“Right now, we’re really looking to fill in the eastern half of the United States and in areas of the greater Northwest,” Lundy says. “We’re looking at larger markets such as cities like Albuquerque, N.M., and other places where we are not at now but we would consider opening two or three stores in that metro area to give ourselves a significant presence. We’re also starting to look at the fringes of other large markets.”
As Stage Stores and its affiliate brands pop up in new markets, the company makes sure to keep house in current markets, as well. In 2013, Stage Stores remodeled seven stores, including its two largest locations. It also relocated and/or expanded six other locations. One of its major capital investments this year includes the rollout of a new fixture and signing package at 10 percent of its stores – approximately 80 locations. The company will continue the rollout with 50 more stores in 2014.
The design includes a new sales floor planning process featuring table planograms and a mannequin runway direction. The updated design also includes new promotional and clearance signing templates across all stores. Aisle fixtures and back wall treatments have also been upgraded.
“One of the neat things we did in these stores was switch to six-way chrome racks and white laminate tables,” Lundy explains. “The new white background helps us show off the color and features of the merchandise ,and the six-way rack allows us to have three floor-facing fronts versus the old four-way racks. It’s a much cleaner look, and the rollout with those roughly 80 stores has worked out extremely well. Those stores are outpacing the company, and we plan to continue the rollout into 2014.”
The overall store growth has been matched by growth in individual product categories, as well. Its key national brands continue to be sales leaders, and 83 percent of its merchandise falls within that category. Major gifting holidays such as Valentine’s Day, Mother’s Day and Father’s Day also continue to drive sales, and the company is seeing and reacting to strong growth in athletic apparel and shoes, with Nike being its No. 1 brand. Home décor, gifts and small electronics are also on the rise this year. In addition, fragrances and cosmetics – the category that tends to withstand recessions – has continued to deliver strong comps year over year.
The strong growth in fragrances and cosmetics echoes the lipstick theory of many cosmetic players, including Leonard Lauder, chairman of Estee Lauder Companies. As the theory goes, during a recession, consumers – especially women – may not have hundreds for a new wardrobe or thousands for an expensive getaway.
However, some can spare a few bucks spent at the makeup counter or in a nail salon to earn a feel-good moment at an affordable price. Over the past year, Stage Stores has opened 35 new Estee Lauder counters, 37 new Clinique counters, 10 Smashbox counters and 13 Origins counters across its locations.
The investment in fragrance and cosmetics is a direct result of improved monitoring of consumer habits. Stage Stores recently expanded headcount traffic counters in 106 stores and rolled out Forsee customer feedback surveys. Also, a new live dashboard reporting system allows district managers to access sales reports by store and down to the store associate level.
While monitoring sales trends, Stage Stores is also investing in technology that makes sales easier. In 2013, the company rolled out signature capture, e-receipts and launched a new e-commerce platform. Next year it will introduce a new mobile point-of-sale system. The line-busting technology should result in reduced customer wait times.
The capital investments in sales and merchandising play a significant part in store growth, but Lundy maintains that face-to-face time between customers and associates is a main driver in customer sales and satisfaction. Stage Stores continues to invest in recruitment and human resources, such as piloting a Kronos e-hiring process in 93 of its stores. It’s also installing a Reflexis Labor Scheduling System, which is planned for a 2014 rollout.
When it finds valued associates, the company focuses on retention and career growth. Lundy himself is a testament to those efforts. Lundy started off in the stockroom in 1976 and by college had worked his way up to sales associate. After that, he managed a few stores and worked in the Peebles’ corporate office as vice president of human resources for 12 years. That was followed by the director of stores title for the eastern territory for another dozen years. He adopted his current role last July.
“People often ask me how I could spend such a long time with one company and my answer is that it’s a great place to work,” Lundy says. “It’s a company filled with great people really focused on taking care of the customer and serving our small towns. There’s also plenty of opportunity in the company for people to move up through the ranks and assume more responsibility.”
No matter how large the company grows or how much individual success leaders within the company achieve, Stage Stores and its employees still hold on to the small-town values that have given it success. Giving back to its community is one of those values.
As part of a corporate-wide program called Community Counts, Stage Stores and its sister brands partner with hundreds of communities across the United States to give back through service and active involvement in charitable causes, sponsorships and individual associate volunteerism efforts.
For example, the Palais Royal team in Houston partnered with SKECHERS and Moms Helping Moms Texas to help distribute new shoes to students of Epps Island Elementary School in Houston. Nearly 1,000 children received a new pair of BOBS from SKECHERS to kick off the school year. In addition to SKECHERS shoes, Palais Royal donated goody bags filled with school supplies and t-shirts for the children who attended the event.
In Shepherdsville, Ky., Goody’s store associates supported the American Cancer Society by participating in the Relay for Life Event of Perry County Central. The team of associates raised more than $1,000 for the cause, and the event overall raised $42,607 with the help of 16 teams and 190 participants.
Also, associates from a Peebles store in Cadillac, Mich., pulled their funds together to purchase backpacks and school supplies for students who attend the community’s Cadillac Area Public Schools. Their efforts raised $225 and ensured that those less fortunate would begin a successful school year with new backpacks loaded with supplies integral to their learning.
“We’re very proud of our associates,” Lundy continues. “Anytime we do a customer survey or receive feedback, the highlight is always our associates. Technology is great, but our associates get tremendous recognition from the customers on how friendly they are. They feel like family. Many customers come by the stores to see and speak with our associates, and they really are the basis of our success. They are the heart and soul of the organization.”
Synapse Group Inc.