Lechters rolls out new Kitchen-product concept

DSN Retailing Today, July 23, 2001 by Mike Duff

WOODBRIDGE, N.J. -- Lechters is already getting positive results from its newly remerchandised stores that feature clearer sight-lines, more customer-friendly organization and an expanded product assortment within the kitchen category, chairman and ceo David Gully told DSN Retailing Today during a walk-through of one of the updated units.

Lechters is remaking itself, in several steps, into thinkkitchen, a concept that will establish the company as a specialist in kitchen and food-related. housewares.

As part of a program that will eventually include rebranding the retailer under the new thinkkitchen moniker, four stores have been reformatted and will serve as models for the 18 that will be made over during the first phase of the conversion process. These 18 units will include one store in each of the company's administrative districts. Lechters has 240 Lechters stores and 84 under other banners. With the exception of a few outlet stores, the bulk of the chain is to be converted to thinkkitchen.

Initially, Lechters's main concern is developing the new merchandising program and getting it out to all stores by October, in time for the holiday selling season. "We've cut down fixtures, introduced new shelving," he pointed out. "We thought the stores could do a better job of displaying the merchandise."

The 3,800 sq. ft. in the Woodbridge Center Mall, not far from the company's Harrison, N.J., headquarters, has seen gains in several key areas since the remerchandising effort was completed about two months ago. The updated stores have seen boosts in sales per square foot, sales per transaction and average price point sold, said Cully. The Woodbridge store now enjoys sales per square foot of $325 vs. $283, and both sales per transaction and average price point sold have increased between 35% and 40%, Cully said.

The remerchandising, which included the addition of new fixtures and a signing package, costs about $10,000 per unit, Cully said. The thinkkitchen name initially won't appear as the store banner of the remerchandised units.

With Lechter's in bankruptcy, it wouldn't be imprudent to spend another $8,000 per store to have the name switched over the entrance, he said. The thinkkitchen concept, though, is detailed in storefront signing conspicuous through the unit's entrance windows. The whole signing package as it will finally appear in the reconfiguration isn't yet complete as internal material detailing the stores value message is still being tweaked.

Success with the remerchandised stores during the first stage of the Lechter's repositioning is critical. The company is counting on the additional revenues the updated stores generate to complete the chain's conversion to the thinkkitchen banner.

Although still using the Lecters name the remerchandised stores do present customers with the elements that constitute the thinkkitchen concept. Cully said the remerchandising took on three critical aspects, including presentation, price points and assortment.

In terms of presentation, fixtures were lowered and amended to present products in a more item-oriented presentation. Cookware, for example, is presented hanging when offered as open stock and in groups on eye-level shelves when offered as sets. Products packaged for sale are available directly under the displays so shoppers can pick them up easily.

In terms of price points, Lechter's now offers a much wider array of choices. Take coffee makers as an example. The selection starts off with brands such as Mr. Coffee and proceeds to Krupps and similar department store labels.

Adding higher-end price points--after several years in which Lechter's focused, on traffic-building items priced under $10--has helped build per-transaction sales and, of course, has been the key to building average unit price sold. Lechter's now uses an everday low price (EDLP) strategy in stores; it replaces a previously employed high/low approach.

Under the new merchandising program, the assortment was edited to about 2,000 core items, then approximately 2,000 more kitchen-oriented skus were added to flush out the selection. Goods are arranged in clear good/better/best selections from right to left on shelves. New product categories include gourmet foods, which are offered in their own fixture, and as accessories with baking cookware.

Lechters has completely rebuilt its assortment in an effort to become a kitchen specialist. It is dumping product segments such as picture frames, except in the case of a few urban stores, in high population density locations in New York and, perhaps, Los Angeles and Chicago. Where the company determines the environment is appropriate, Lechters will keep a limited selection of home decor and housekeeping items as a convenience for neighborhood residents.

Another element of the remerchandising involved moving fashion and novelty up front. Cully said, until now, Lechter's hasn't taken sufficient advantage of its windows and upfront display space. Now it mounts seasonal presentations in front of the check stand in addition to the new window signage.