Dress Barn tailors 2002 growth plan to include entry into California market - Brief Article

DSN Retailing Today, Jan 7, 2002 by Mike Duff

SUFFERN, N.Y. -- Dress Barn didn't have an easy fiscal 2001--few apparel specialists did--but the company is forging ahead with plans to enter Southern California on the way to its ultimate goal, $1 billion in sales.

The company announced at its annual meeting Dec. 10 that it will add 75 new stores in the current fiscal year, with units opening in existing and new markets, including The Golden State.

The new stores are part of a broader effort to build sales and upgrade operations. The company has been rolling out a new format that David Jaffe, vice chairman and coo, described to DSN Retailing Today as "more flexible" than previous designations. It should help Dress Barn tailor operations in new markets more closely to local preferences. The company also has been revamping its marketing by adding new technology and upgrading training to improve performance.

In the fiscal year ended July 28, Dress Barn posted net sales of $695 million, up from $656.2 million in fiscal 2000. Comparable store sales in fiscal 2001 were off by 1.2%. Net earnings were $35.3 million, or $1.88 per share, down slightly from $36.7 million, or $1.89 per share, in the previous year.

Dress Barn opened 68 stores in fiscal 2001 with almost all following the newer combo store prototype that teams Dress Barn and Dress Barn Woman operations. The company closed 37 underperforming stores during the year, so net store increase was 31 to 720 units by the end of fiscal 2001. Selling square footage increased by 7%.

While it is rolling out in Southern California, the company said store openings in existing markets will involve entering downtown locations and adding to existing clusters in suburbia.

Fall of calendar year 2000--in the first half of Dress Barn's fiscal 2001--was relatively strong, bolstered by the success of private-label merchandise.

Indeed, Dress Barn reported record net income up 33% from the previous year, and earnings per share up 41% in the first half of fiscal 2001. Spring saw a slow down, though, as the economy continued to skid. Dress Barn suffered external and internal blows in the first half of the latest fiscal year.

The company, based in the New York City suburb of Suffern and heavily represented in and around the region, was hit hard by the events of Sept. 11. Then, in early December, Kathryn Buffano Foster, president and chief merchandising officer, announced she was leaving the company to become vp of apparel at Sears.

In the first quarter, ended Oct. 27, Dress Barn's net sales decreased by 3.3% from the year-earlier period to $182.1 million. Dress Barn said underlying the weakness was an 8.2% decrease in comps.

The company opened 38 stores and closed 4 underperforming locations in the quarter, ending with 754 stores in operation, and an 8% increase in total selling square footage.

"Fall has been tough for all apparel specialty stores," said Elliot Jaffe, chairman and ceo, adding that Dress Barn has been weathering the tough times better than many others in its retail channel. He remains optimistic the company has initiated efforts that will keep it on its path to the ultimate billion-dollar goal.