Garden Ridge offers 'home' style feast for senses - chain of crafts/home-decor stores - Company Profile

Discount Store News, July 17, 1995 by Dawn Wilensky

DALLAS - "We don't sell anything that people need," joked Garden Ridge president Jack Lewis. He characterized the home decor and crafts chain as "an entertainment experience that appeals to consumers' sense of fun and excitement."

This fun and excitement is delivered in a big box environment - anywhere from 150,000 sq. ft. to 160,000 sq. ft. A deep selection of home decoration and crafts items gives the Dallas-based chain a unique footprint, making it essentially 10 category killers in one store.

"Our stores appeal to consumers' senses. We have scents around the store for people to smell, music for them to listen to, merchandise they can pick up and touch and bright, bold, vivid colors for them to see all around the store," said Mark Pruitt, general manager of the Dallas store.

The core customer, a woman aged 18 to 54, typically visits the store twice per month and spends 2 1/2 hours per visit.

A racktrack floor plan guides the consumer through the segments: home accents, florals, pottery, crafts, housewares, candles, baskets, party goods, pictures and holiday items. Within the home accents department are framed art, decoration items, casual furniture and an assortment of accessories. Departments are identified by 7 1/2-ft. color-coded icons of sculpted foam and masonite.

Entering the store, shoppers are greeted by fields of silk and live florals, thousands of baskets, nearly 80 ft. of kitchen utensils, an Everything Rubbermaid assortment, party goods for every occasion, bakeware, pots and pans and home furnishings like bathroom accessories, decorative pillows and throw rugs. The merchandise selection consists of both branded and private labels.

Consumers won't find much in the way of commodities, though. The chain adheres to its home decor roots.

"Our focus is on home decoration products and crafts, and anything that doesn't fit that description is not included," Lewis said. "We stay focused so that from a customer perspective, we stay category focused. It allows us to have a merchandise assortment that they would expect to find all at a one-stop, time-saving location."

And consumers seem to be responding. On a recent visit, many shoppers walking the aisles had shopping carts full of merchandise.

"Every few months I make a list of everything I want, and then I make the journey to Garden Ridge. I know that they'll have everything I'm looking for and much more," said LouAnn Cleary, who shops at Garden Ridge about five times per year.

That's music to Lewis' ears. He is nothing short of obsessive about customer service.

"Our merchandise is available from many of our competitors, but our primary focus is on the customer," Lewis said. "That's what keeps them coming in our doors."

To ensure that they keep filling the aisles, the chain conducts focus groups 10 months out of the year to find out how customers rate the chain. In addition, an independent company conducts a monthly Secret Shopper survey, judging stores on various criteria like speed of check-out, in-stock positioning and knowledgeable salespeople.

Employee training is also imperative. New associates go through induction training to learn the basic rules of retailing, then complete an on-site certification program through which they can become specialists in florals, pottery/nursery or crafts.

Building the chain hasn't happened overnight. The effort has been 15 years in the making.

The company opened its first store in San Antonio in 1979 and encountered financial problems nine years later when founding owner Eric White retired. Problems resulted from changes in the company's merchandising strategy, a failed expansion plan and mounting debt from a leveraged buyout.

A group of investors bought the company from White in 1988 and two years later sold it to its current management team of chairman and chief executive officer Armand Shapiro and president Jack Lewis. Both men worked together at Computer-Craft, a chain of computer stores that was sold to Businessland in 1988.

At that time, the team found itself at the helm of a chain that had posted a loss of $2.9 million on $44.4 million in sales. However, by fiscal 1994, the company rebounded with annual profits of $4.6 million on $64 million in sales and doubled its store base.

The chain currently has eight units, with one store planned for the third quarter in Dallas/Ft. Worth and two other stores in the new markets of Oklahoma and Tennessee with stores in Oklahoma City and Memphis, respectively. Going forward, the chain plans five to six more units in 1966 in the Southeast and South Central United States.

To help facilitate this growth, Garden Ridge went public May 16, with net proceeds to the company of approximately $39.6 million. the proceeds were used to redeem the preferred stock, pay accumulated dividends and repay all long-term debt while leaving the company with about $11 million in cash to fund planned expansion and for other working capital purposes.

The company reported net sales of $26.6 million for the first quarter of '96 compared with $17.0 million for the same period last year. Net income was $123,000 for the first quarter compared with $113,000 for the yearago period. Comp store sales increased 2% over the same period.