Merchandising �� the final frontier? - brand name boutique departments in discount stores - column

Merchandising ... The Final Frontier?

I love these Gitano shops and Brittgear tables and all these brand boutiques as much as the next guy. Not only do they lend the discount store industry a certain sorely needed panache, but they're fun to write about. Early indications are that they're also big cash cows for both retailer and vendor.

But let's just return to piperack reality here for a moment. Is there an outer limit to this merchandise presentation upscaling at discounters? After all, we're talking about discount stores here. Won't the discount store customer--knowing someone's gotta pay for these glitzy shops--begin to think she might not be getting the best possible "value"? Or, if these shops proliferate in other departments of the store, won't the customer just be scared off?

At least so far, that's not what's happening. The Gitano women's wear shop at Caldor's East Patchogue, N.Y., store--which looks simply smashing--is pulling in the enthusiastic teenage girl as well as the curious missy customer. When I was out to see the shop before the "official opening," one plump woman who looked to be in her late 40s or early 50s came up to me, thinking I worked there, and said, "My daughter will love this. Is it going to be around for a while?" When she was assured by the store manager that it would, she walked away with a big smile on her face, again saying, "My daughter will love this."

Haim Dabah, president of The Gitano Group and one of the sharpest marketing-oriented apparel executives around, told me recently that these Gitano shops at the discounters and mass merchants won't be just a fad. It's the wave of the future--it pulls the customer into the department, it features regular-priced merchandise and it has the customer often leaving with two items or more. Sales per square foot at the shop in Caldor are more than double the store's average.

Especially if the vendor is willing to share certain costs with the retailer (like paying the salary of an extra person on the floor during peak hours, which Gitano does), these shops are surprisingly inexpensive to start up and maintain. Gitano pays for the fixturing and does most of the set-up itself.

For the 25 to 30 new shops coming for back-to-school (see story, page 1), Gitano is hiring retail buyers, giving them training in apparel sales and adding them to the Gitano shop team.

It is all very exciting. But recent history has shown that retailers should proceed with a certain degree of caution. The retailer must know its customer and must know which particular units, if any, are right for such a shop.

Let's not forget what happened at Bradlees. The new prototype looked so much like a department store--and the attitude and even the mix was so much like a department store--that Bradlees confused and eventually lost many of its customers.

Not that adding one Gitano shop--or a Brittgear table or a McGregor boutique--in a store is quite the same as what Bradlees did, but it's something to think about.

COPYRIGHT 1989 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2004 Gale Group