Strouds growth stays conservative
Donna Myers -- Casual Living, April 15, 2002
Spending its first year as a company focused on stabilization and profitability, Strouds plans to stay on that path for another year as it strengthens its balance sheet.
Last year proved to be tough for many retailers, and Strouds was not as profitable as it had hoped to be, though Rob Valone, president, stressed that it was still profitable. The company will continue in a conservatively fiscal mode, as he didn't believe the economy would improve much this year. "We want to prepare ourselves for growth, but we don't want to do too much too soon," he said.
Gary Van Wagner, cfo, added that the retailer still needs a year to "get comfortable in its new skin" and will continue to build more customer-friendly store operations, as well as see how new programs play out.
Already the strategy seems to be working. The company achieved double-digit comp store increases for March of 11 percent — 10.3 percent excluding Internet sales. These numbers were helped by the retailer's revamped catalog, which shifted from a price-dependent strategy to a product-oriented one. The resulting sales had an increase that was sustained, instead of a quick spike in sales that then quickly fell, Valone said.
Strouds is also bringing "theater back to retail," Valone added, with its Nights of Inspiration, a program that brings in its best customers for various seminars that include such topics as how to dress a bed or bath. It plans to continue the program every April and October, involving about 10 stores at a time on a given night. Customers have enjoyed the events, he said, and that has been reflected at the register.
Its new Nautica program, launched last November, has also been received well. "It's a look we didn't have covered in the balance of the store," Valone said.
Though Strouds has had its supporters, it has also had its share of doubters, though the company hopes they are being turned around as well. One manufacturer told Valone last year that Strouds was not in its five-year plan; this year, however, they are already back in its fold.