Jacks expanding, modernizing, upscaling in middle America - Jacks Discount Stores - Two regional discounters improve competitive stance

Discount Store News, Sept 25, 1989 by Laura Liebeck

Jacks Expanding, Modernizing, Upscaling in Middle America

QUINCY, Ill. -- Jacks Discount Stores, a little-known but growing regional discounter, is currently building its 13th store and adding to its annual revenues of more than $140 million.

Bill Daniels, president of PennDaniels Inc., operator of the privately owned and family-operated Jacks, said he plans to continue growing and upscaling the 31-year-old firm, and would like to open a couple of stores a year.

Daniels declined to name any specific sites but said he has his eye on 16 to 18 additional communities where he would like to do business. All of the sites are in the Midwest.

"My goal is to be the dominant retailer in the communities in which I do business," Daniels said.

This is a lofty goal since Daniels' chief competitors are K mart, Wal-Mart and Target in the mass market, Menards and Furrows/Payless Cashways in home improvement merchandise and the specialty automotives retailers. The latter two are strong, dominant departments for the retailer.

For the past five years, Jacks has been upgrading and expanding its stores to improve its competitive position in those markets.

"We're not afraid to compete," said Daniels, noting that Jacks may be a small discounter compared to its main competitors, but the chain is flexible and customer-driven.

For example, Jacks added handicapped-accessible entrances and checkouts, and non-candy checkout lines in every store after customers requested them, said Daniels.

Founded in Quincy in 1958 by Daniels' father Joseph--a footwear salesman who spent 2 1/2 years as a store manager for Grandpa Pidgeon's before starting the retail chain--Jacks is now run by the founder's children: Bill, Dave and Jane Daniels Harder.

Jacks is a 12-unit discount department store chain operating in small- to mid-sized communities in Illinois and Iowa, and soon in Missouri. Most stores are about 80,000 square feet in size with 65,000 square feet of selling space, and carry 75,000 sku's.

By year-end, Jacks will open its 13th store, its prototype, in Hannibal, Mo. The new store will feature the changes that have been implemented throughout the chain over the past five years, plus a few others, explained Daniels.

It will be the first store to open on-line with the new POS system. Jacks is now rolling out its new Fujitsu POS system to all its existing stores. By fall, each Jacks store will be able to scan information directly into the system.

Jacks' sku mix includes all the major discount store categories except consumer electronics, which Jacks "dabbled in" but dropped a few years ago, and a light assortment of RTA furniture. Jacks does sell various consumer electronics-related merchandise.

Jacks maintains no leased departments.

The chain's stores are serviced by the company's lone distribution center, a 270,000-square-foot facility in Quincy.

Jacks' merchandise mix is weighted more toward hard lines than soft goods, 60 percent to 40 percent, said Daniels. The customer base is "Middle America," people in the lower-middle to upper-middle income groups.

Jacks typical shopper is female (65 percent female vs. 35 percent male).

Daniels said the company operates with a basic philosophy: "If we can't do it well, let's not do it at all."

Conversely, Jacks has chosen a number of departments in which it will do well, among them hardware/home improvement, automotives and domestics, which was recently revamped to include merchandise by New York textiles supplier and designer Park B. Smith. All three departments are outfitted to compete with specialty chains or department stores, said Daniels.

The domestics department--the last of the company's departments to be upgraded in its five-year-long program--sports a new 5,000-square-foot layout--up 50 percent, 3,802 sku's and 142 vendors, according to domestics buyer Lorna Vardaman.

The entire domestics department features color-coordinated displays and vignettes that include merchandise from throughout the store.