Out of the woods and Ch. 11, Garden Ridge re-emerges

DSN Retailing Today, July 11, 2005 by Debbie Howell

The month of May brought both a new ceo and bankruptcy emergence for home decor retailer Garden Ridge. The new ceo is Mary MeNabb, formerly evp of marketing at Factory 2-U Stores. Garden Ridge, a $400 million chain, closed nine stores and one distribution center during its reorganization and now operates 35 stores. Despite its smaller size, Garden Ridge has reversed a trend of declining comparable-store sales that in part led to its bankruptcy, with comp gains up 5.2% fiscal year-to-date. McNabb spoke with DSN Retailing Today last month to talk about the retailer's success and plans for the future.

DSN RETAILING TODAY (DSNRT): What attracted you to this company and this opportunity?

MCRABB: The idea that the company has been reorganized and now is ready to go forward with a great concept much more financially secure and stable than it's been. We've got a great team in place to drive the business and to satisfy the customer.

DSNRT: What do you see as some of the challenges the company faces having recently come out of bankruptcy and what are the new strategy plans?

MCNABB: We're going to focus on growing our comp-store sales and our profitability inside our boxes--that's our first mission. So I am not looking at a vast expansion plan at this moment in time. I do believe that the concept has legs to grow and expand, but right now we need to just focus on taking care of business and taking care of our customer and delighting her with new product, fun stores, an exciting shopping experience.

DSNRT: Who is Garden Ridge trying to reach with its marketing efforts and in-store merchandising?

MCNABB: We know who our target customer is. She's highly engaged in home decor. She's most often a homeowner. Her income is average to better. She loves decor and she loves expressing herself in her home. So we offer her that one-stop-shopping experience for everything she considers to be necessary for either decorating or entertaining. We offer a broad, ever-changing assortment of new product, seasonal product, promotional decor. We offer unbeatable values that let her redecorate and still stay on a budget.

DSNRT: What differentiates Garden Ridge from its competition?

MCNABB: The environment we're creating is one that's entertaining and delightful, that overwhelms her five senses. That's what we're going for. We know we have competition across many channels. We feel that we offer more decor and less craft than the crafting segment, a broader selection than the discounter because big box is focused primarily on decor, more fashion and more selection than the off-pricers or the dollar stores and we've got a more broadly appealing assortment than the specialty stores, so there's a reason for us to exist in the same market as each of these different segments.

DSNRT: Any plans on changing the mix?

MCNABB: Our mix has been evolving over time and we have introduced and been successful with patio and furniture and some additional categories. Frankly, what we're known for are floral, greenery and art. Those are core to our existence and we really do stand for that in our assortments. Then around that we've built very successfully pottery, garden, home decor, a great domestic department.

Of course the seasonal aspect of our business is just enormous and just wonderfully fun. We're going to continue to refine it and make it more competitive

DSNRT: In the past some experts have criticized Garden Ridge as having stores that are too big and difficult to manage from a cost perspective. Are you happy with the sizes of the stores?

MCNABB: Some of the best performers are our biggest stores. All of our stores now are malting money. We will continue to operate just as we are, with a little less than a third of our stores in the 90,000-square-foot to 120,000-square-foot range. For us the 90,000-square-foot concept was sort of the last iteration and we've got successful stores in that group. The balance of our stores are larger boxes and they are all performing.

DCNRT: With five straight months now of comp-store sales gains, what do you attribute to driving those increases?

MCNABB: Now that we've exited reorganization we have a better flow of product into stores and are doing business easier. When you're engaged in reorganization it really does eat up everybody's time and focus. We're refocused on the customer and refining the mix across all the categories, offering better, bigger, greater value and new, fresh merchandise.

DSNRT: Can you share more about your background and what it brings to Garden Ridge?

MCNABB: My leadership style is one of building relationships--building relationships with our associates, our suppliers and our customers. That will be easy because we are a company that believes in relationships. Our buyers and our vendors have worked wonderfully together over the past several years to continue to bring that new fresh product to the Garden Ridge customer. My intention is to continue to work with our vendor community to support us in offering unique product.