Store visits: a tale of two discounters - K Mart Corp., Child World Inc - Buyers & Sellers - column

Discount Store News, June 17, 1991 by Don Longo

Store Visits: A Tale of Two Discounters

With apologies to Charles Dickens: It was the best of retailing; it was the worst of retailing.

I'm talking about a recent day I spent visiting discount stores on Long Island. I started the day at Kmart's then-newest store in the New York suburb of Sayville. That store is clearly one of the finest examples of discount retailing. Kmart just opened its third Long Island store (June 6 in Levittown). The Levittown store is expected to be one of the largest volume stores in the entire Kmart chain, but the Sayville store is still considered to be Kmart's model store.

Even with all the new technology features being tested in Sayville, I was most impressed with the intelligent fine-tuning of the store's merchandise mix. Throughout the store, numerous low-quality and low-margin items have been eliminated, replaced by new lines of better quality merchandise. Kmart buyers have done a tremendous job of going out and finding new products, like decorative spray paints, to create incremental business. The shopper is offered a better selection of products in those lifestyle departments where Kmart has decided to be dominant. The store retains its discount image with very sharp prices.

Driving a few miles west, to Bayshore, brought me down to earth. The recent history of Child World reads like a soap opera. The chain has undergone management turnover, an almost sale, and a precipitous drop in earnings. Now, the No. 3 toy chain is on the verge of being sold again. From the looks of the store I visited, the new owners will have their hands full. It appears that every bad buying decision that could be made, was made. Someone must have gone batty . . . with Batman action figures, Batmobiles, Batwing aircrafts, Bat action sets, etc., creating mountainous runs of unsold, clearance merchandise. What an example of licensing run amok! The store had more Bart Simpson dolls than I've ever seen in one place. Hordes of Dick Tracy merchandise overflowed the shelves. Why were there six colors of Yum-Yum plush dolls when four would have been sufficient?

Virtually everything in the store was marked 30% to 50% off, with no explanation. It looked like a fire sale. And, more popular items, like several Nintendo and Sega software titles and some juvenile products, were conspicuously out of stock.

The former Toys 'R' Us execs who are expected to soon take the reins must develop a clearer merchandising philosophy, one that enables Child World to meet customer expectations. And, they must put the mechanisms into place to execute their merchandising philosophy.