Consolidated Stores to enter Northeast and Northwest

Discount Store News, May 24, 1999 by Cecile B. Corral

COLUMBUS, OHIO -- Consolidated Stores, which owns the national toy chain K*B Toys and the regional closeouters Odd Lots, Odd Lots Furniture, Big Lots, Mac Frugal's and Pic 'N' Save, is breaking into seven Northeastern states and three Northwestern ones for the first time.

The decision was spurred by retail consolidation in the region, which has opened up new real estate opportunities, Kent Larsson, executive vp of merchandising for Consolidated, told DSN.

"We hadn't come into the Northeast mainly because of the lack of availability of sites," Larsson said. "We acquire our sites the same way we acquire our closeout merchandise: as it becomes available. And for years this region didn't have many available sites. But now we're finding them."

Like many of its competitors, Consolidated has been shopping former Caldor units as well as some of the Hills stores acquired by Ames that are being weeded out due to market overlap. Consolidated also is hunting down older supermarket sites for its closeout stores, which average about 25,000 sq. ft.

Of the 100 new closeout units Consolidated is building nationwide in 1999, the main concentration of growth will be in the Northeast and the Northwest, Larsson said.

Starting late last year, Consolidated started this expansion with the opening of one shop in Seattle in November and a second in Connecticut in December.

The remaining new closeouts will be located in Massachusetts, New Jersey, New York, Maine, New Hampshire and Vermont and in the Northwestern states of Oregon, Washington and Idaho.

With new territory comes new competition. But Larsson contends it's nothing the chain hasn't already confronted elsewhere.

Major mass retail discounters such as WalMart, Kmart, Target and Ames already compete with Consolidated for lower-middle-income customers in other markets, particularly in the Midwest, he said.

"Everywhere you go these days, you've got just about the same set of retailers, whether they are the bigger ones such as Target or the smaller regional stores," he said. "It's nothing new to us. We plan do exactly what we've done for our business in our other markets."

As Consolidated expands its closeout store base, the company's furniture and toy divisions will also branch out this year.

Another 150 Big Lots Furniture units are being built in 1999, some free-standing and some additions to existing Big Lots stores. They sell low-cost furniture pieces and sets, including upholstery, bedroom sets, dining room sets, dinettes, single pieces and some ready-to-assemble items. These stores will be added to Consolidated's existing markets primarily in the Midwest.

K*B Toys is also opening up new doors nationwide this year. Michael Glazer, who heads Consolidated's toy division, said there will be 70 new permanent units built in regional and strip malls and outlet shops and at least 100 more seasonal K*B Express units in regional malls.