Accessories sales accelerate, category gains precedence - Discount Industry Annual Report, part 2

Discount Store News, July 20, 1992

Accessories have proven to be a fertile merchandise category during a recession. While it may cost too much to buy a dress, the purchase of a scarf, a pin or a necklace to update an existing dress is often a feel-good and affordable impulse purchase.

Accessories did well in 1991, and to keep the momentum going, discounters are updating merchandise and formulating merchandising strategies for the department, rather than considering it an afterthought.

Just as in apparel, the products that are considered "hot" change frequently in this market. In 1992, retailers can expect caps to continue to top sales. Hair accessories are also doing well, with scrunches and handbands, popular items for those with long tresses.

The look of the accessory area is also undergoing some changes. Most discounters now feature the department closer to the front of the store. At regional discounters such as Jamesway and Venture, new prototype formats are making the department easier to shop by sectioning the many accessory sub-categories.

The actual merchandise has also been upgraded. Most discounters offer real leather handbags as well as vinyl in their departments.

One big success story that will surely continue is sportbags. Used as everyday totes or for lugging around exercise items, the bags gets heavy workouts and need replacing. The consumer is also buying more than one at a time in order to match the myriad of colors and patterns with an outfit or mood.

Manufacturers are also increasing the number of styles offered in sportbags. Duffles and backpacks will be featured prominently, especially for back-to-school.

The accessory department at full-line discounters is changing in another way. At one time it featured only women's accessories.

However, in stores such as Venture, a broader of children's merchandise from Barbie earrings to Mickey Mouse hair clips are now featured in an all-inclusive accessory department.

One area that is not faring as well in accessories is belts. With oversized tops a predominant fashion trend, the need for fashion belts has been diminished.

More stores are carrying basic styles in belts that work with basic bottoms like jeans. Belts as a whole have also suffered as more manufacturers include them with a purchase.

They may not be making a comeback too quickly, but with more body-hugging styles using Lycra spandex coming into vogue, belts may have a resurgence in sales.

The shoe area - whether a leased department at Kmart or company owned like Wal-Mart or, recently, Venture - is having to compete with other retailers on a different level.

     Accessories(1)
     $2.9 Billiom
Full-Line Discounters       $2.1B
Catalog Showrooms             -
Membership Warehouse          -
Specialty Discounters       $0.8B
     Full-Line Discount
     Store Productivity
Sales                       $2.1B
Sales Per Store            $263,000
Dept. Size                2,200 Sq. Ft.
Sales Per Sq. Ft.          $119.32
Turns                         3.7
Initial Markup               45.8%
Gross Margin                 43.9%
(1) Accessories include handbags and hosiery
Source: DSN research

Specialty sporting goods stores are by far the favorite venue for the best selling shoes - branded sneakers. That has made it necessary for offerings at discounters to favor items like casual shoes for women and work shoes for men.

Discounters will continue trying to lure brands into the stores, but market leaders like Nike are not likely to bite. At least not this year.

Brands are not as predominant in other shoe areas, but the large apparel brands - Gitano, Chic, Bonjour, Sasson - bring name recognition into the shoe department as well.

     Footwear(1)
     $10.6 Billion
Full-Line Discounters       $2.1B
Catalog Showrooms             -
Membership Warehouse          -
Specialty Discounters       $8.5B
     Full-Line Discount
     Store-Productivity
Sales                       $2.1B
Sales Per Store            $263,000
Dept. Size                2,200 Sq. Ft.
Sales Per Sq. Ft.          $119.32
Turns                         3.3
Initial Markup               50.4%
Gross Margin                 39.2%
(1) Also includes sales Through leased departments
Source: DSN research