Dress Barn spells out plan for 2000

Discount Store News, Jan 24, 2000 by Mike Duff

SUFFERN, N.Y. -- Although results for Dress Barn's last fiscal year were mixed, chairman Elliot Jaffe noted at the retailer's recent annual meeting that Dress Barn in 1999 was up against the best year in its history, 1998.

He also outlined a series of new initiatives to help the company move forward.

With its customers expressing a preference for casual-wear over careerwear, Dress Barn reported mixed results for its 1999 fiscal year ended July 31,1999.

Sales were up 3.0% to $616 million from $598.2 million the previous year. However, net earnings declined 17.1% to $33.3 million, or $1.53 per share, from $40.2 million, or $1.70 a share. Same store sales decreased by 4%.

Yet more than difficult comparisons affected the numbers. Maintaining sales per transaction has been difficult when women are purchasing sweaters to wear to work rather than suits, Jaffe told DSN. Customer trade-offs of that type are reflected in Dress Barn's results, he said.

While some retailers., discounters among them, have drawn conspicuous benefits from the casual trend, mass-market operators that have specialized in outfitting career-oriented women have been hurt. "It's been a tough year for the middle of the market," said Jaffe.

To press for better results, Dress Barn has launched a program to boost its profitability as well as its sales. The company plans to go where the customers are, wherever they are, by becoming a multi-channel destination. In addition to its stores., the company launched a catalog in 1999 and plans to begin e-commerce on its Web site in the first half of 2000.

Still, store operations will remain central to Dress Barn. Among the initiatives designed to boost the company's prospects in general and its stores in particular:

* A repositioning designed to help Dress Barn appeal to a younger consumer that will include image and brand building efforts to give the company a recognizable "personality" in the marketplace;

* The advancement of a lifestyle-oriented marketing campaign;

* An expansion of the Dress Barn label with an emphasis on product attributes over price;

The company also will develop a product mix, including more separates, that reflects customer preference for more casual fashions. It plans 'to narrow its assortments to create more stock depth and to enhance presentation. Dress Barn intends to hire a seasoned, senior marketing executive to support its efforts in branding and developing more of a lifestyle orientation. The intended result will be more image and less price oriented advertising as well as updated store graphics packages, interiors and fixturing.

* The addition of more combo units to the company's store mix;

Most stores open in 20100 will follow the combo store format, which combines Dress Barn and Dress Barn Woman outlets. Thus far, the combo stores have ranged between 9,000 and 10,000 sq. ft., but future stores will likely exceed 10,000 sq. ft. with additional space devoted to shoes, petites and other new merchandising segments. The company plans to open a 15,000 sq. ft. prototype combo store in spring 2000, according to its 10-K SEC filing for fiscal 1999.

Dress Barn had a number of positive figures to report on the real estate side in 1999. For one, total store square footage increased to 4.4 million sq. ft. from 4.1 million sq. ft. at the end of 1998. In 1999, the company invested $25 million in opening new units. The total number of stores in operation increased slightly to 674 units from 669 a year earlier, but the company hit a milestone, opening its 1,000th'store in Providence, RI. In the 2000 fiscal year, Dress Barn plans to open 100 new units as it closes under performing stores.

Dress Barn continues to post mixed results in fiscal 2000. For the first quarter ended Oct. 30, 1999, sales grew by 6% to $167.9 million for the period, and earnings increased by 4% to $9.6 million or 47 cents per share, but comps were flat. Things picked up in November, with sales up 8.0% to $53.1 million and comps advancing 2% but December trended down with sales off 1.0% to $70.9 million and comps declining by 2%.