Garden Ridge tests small format

Discount Store News, Oct 25, 1999 by Debbie Howell

DOUGLASVILLE, GA. -- Garden Ridge, whose stores traditionally run about 200,000 sq. ft., has become the latest specialty retailer to experiment with a reduced footprint. The chain recently dipped below the 100,000-sq. ft. mark with its newest store that opened earlier this month in the Atlanta suburb of Douglasville.

The store, located in a former Home Depot site, has about 95,000 sq. ft. of selling space. That's roughly 10,000 sq. ft. smaller than the home decor chain's former prototype. New Garden Ridge stores next year will follow this smaller format, which is expected to generate the same sales volume as larger stores. Some of the benefits of the smaller size include lower costs in lease payments and utilities.

Executive vp of stores Gary Ramsey told DSN that the smaller box was also attractive because it increased Garden Ridge's options in site locations.

"I really have no doubt it's going to be successful," Ramsey said. "We've got the same assortment as in our other stores, but we're delivering more often."

Ramsey said the average customer shouldn't be able to tell that the store is smaller. Aisles are just as wide and the selection is the same as in the larger stores. Space was trimmed in the back offices and in select departments that generated less sales, while more efficient fixtures and stocking methods also helped.

The only noticeable difference is that the full-service cafe found in other stores was reduced in Douglasville by 700 sq. ft.; it is now a lounge area equipped with vending machines. Depending on customer feedback, future stores will either incorporate this feature or return to the larger, full-service cafe.

Ramsey said Garden Ridge has slowed down its store opening schedule for next year to assess how the smaller store performs. Two new stores that will be similar in size are scheduled to open next fall in suburbs of Dallas and Houston, Texas.

For Garden Ridge, the Douglasville opening marked the sixth and final new store opening of the year. The other five stores were opened in Greensboro, N.C.; Cincinnatti, Ohio; Kansas City, Mo.; and Austin and San Antonio, Texas. Altogether, Garden Ridge now has 33 stores in 13 states.

With a unique assortment of 10 category-killer departments such as floral, holiday, crafts and home textiles, Garden Ridge draws in a very different customer than other retailers. Ramsey said 97% of its customers are female, and the majority of their purchases are impulse-oriented and include such items as Halloween decorations, decorator pillows, floral arrangements and candle gardens. The typical customer spends a minimum of two hours browsing, he said.

The chain stresses guaranteed lowest prices and friendly service, and associates are required to be nice to customers all the time, said Ramsey, adding that some have even been fired for not doing so.

For the creative-minded customer, Garden Ridge strategically places finished projects near product to encourage sales. In the floral department, for example, elaborate arrangements sit atop displays featuring its various components while decorated Christmas trees are placed at endcaps by gondola runs featuring the complete decoration assortment of a particular tree.

Ramsey said the extensive floral department, which includes ready-made arrangements manufactured by a Garden Ridge subsidiary, a custom floral service and create-your-own silk floral components, generates the most sales of any department. Other top-selling departments are seasonal and pictures & frames.

Garden Ridge offers a few private label products, such as its own line of holiday icicle light sets that were on sale for $8.97 at the grand opening compared with a comparable Sylvania brand product priced at $16.98.

Besides custom floral, other service features of Garden Ridge are classes and custom framing. Other services may be added in the coming months, Ramsey added.

Most traffic to Garden Ridge is generated by word of mouth, Ramsey said. At the grand opening in Douglasville, drawings for shopping sprees and free gifts to the first 400 customers added to the attraction, as well as a personal appearance Oct. 9 by "One Life to Live" actress Hillary B. Smith, who plays the character Nora Buchanan on the show.

Even though visitors to the grand opening didn't number the usual turnout of about 500--because the other three Atlanta-area stores also celebrated the Douglasville opening that same day--customers seemed quite impressed with the array of merchandise, loading up their baskets primarily with Halloween decorations such as $8.88 scarecrows. At least two customers stopped Ramsey that morning to comment how much they loved the new store.

Store locations are carefully selected based on psychographic data that corresponds to the target customer. Because of that, each store makes a profit, Ramsey said.

Overall, Garden Ridge reported an 18% increase in sales last year to $364.7 million and a 2% rise in comp store sales. So far this year, sales through the second quarter are up 27% to $176 million, although the chain reported a $7 million loss for the period due to a $3 million productivity charge and $750,000 in recruitment expenses related to finding a new ceo, a position that was filled this summer by Paul Davies, former president and ceo of Champs Sports.