Caldor conundrum: keep hanging tough with fashion? - Apparel Merchandising supplement

Discount Store News, Sept 18, 1995 by Jeffrey Arlen

In a world filled with retailing homogeneity, successful mass merchants have developed points of differentiation.

Wal-Mart wraps itself in the flag as it touts its everyday low prices. Target exudes clean modern minimalism, assuming the position of a budget The Gap or Crate and Barrel. The nation's fourth largest full-line discounter. Caldor. with its urban--it just opened a new unit on a former Macy's site smack in the middle of downtown Brooklyn, N.Y.--strategy takes a somewhat different tack.

Caldor's got attitude.

It better have. With 70 stores--by year's end--in the New York metropolitan area, and another 56 locations in the Washington, Baltimore, Philadelphia and Boston markets, it has to attract the business of street savvy, jaded city dwellers who have more retail options than anyone in recorded history.

Caldor's urban policy is clearly stated in its 1994 shareholders report. "Our strategy is to place new stores primarily in areas with high population densities, including selected existing urban/suburban markets. This translates into `beltway and in' locations, where we believe we can serve more of our fashion-conscious, trend-oriented East Coast customers."

It may not be proper to describe any discount store as fashion forward, but if one could, Caldor is. When short skirts are in style, Caldor has them first and shortest. When denim shirts hit menswear a few seasons ago, Caldor had three rounders of them in its New York-area stores. In the same trading area, Kmart had only one fixture full. Currently, casual dress assortments are in the womenswear spotlight at Caldor.

"We do try to be first with new looks," says Mark Minsky, senior vice president, general merchandise manager.

But is Caldor losing its razor's edge?

First half comparable store sales declined 3.2 percent compared to the same period in 1994, when Caldor had increased 4.9 percent over the prior year.

The company reported a loss, before an extraordinary charge for the early retirement of debt, of $5.9 million for the first 26 weeks of 1995. Earnings for the period last year were $4.2 million.

Most industry observers don't believe Caldor's recent numbers are indicative of any major flaw in the Norwalk, Conn.-based company's tactics. Rather, they say, Caldor's tough first half mirrors a floundering retail environment.

The downturn has caused Caldor to cut back new store openings this year to nine from an anticipated 17.

But there may be a light at the end of the tunnel generated from--of all things--fashion. A situation that plays into Caldor's positioning and area of expertise. "There are encouraging signs for fall because we are starting to see some very good sell-throughs in newness for Back-to-School. A year ago, basics were happening, you couldn't get enough five-pocket jeans on the floor. But fight now we're starting to see some real fashion success stories," says Minsky, who notes good early sales of Glacier Fleece, Caldor's name for its Polor Fleece-like polyester fleece. Dresses, jumpers and patterned "fashion" men's knit and woven shirts are also selling well.

It follows that Caldor's apparel-buying plan for the rest of the year is in keeping with the store's aggressive fashion position. "We are very encouraged by some fall fashion items, and that is where we are putting our money," Minsky says.

Sweaters, a category that in recent seasons has fallen on hard times, will gamer a substantial portion of this open-to-buy. "This could be a sweater year and its been a while" since the area has commanded serious consumer attention, Minsky says.

Caldor built its apparel businesses, which Minsky is quick to point out are constructed not only of directional fashion but also of updated and basic commodities, on an integrated combination of branded and private label clothing.

While national labels are well represented on Caldor's selling floor, Its private label apparel shines. Caldor's product development staff has obviously done its homework, crafting proprietary goods that are right on-trend and positioned with continuity throughout the store.

It's Trails End line of ruggedwear and Harbour Classics collection of updated traditional merchandise are fine examples of the company's design expertise.

The latest company effort, Fresno, the denim-based label it introduced about a year ago has produced strong sales in men's, women's and childrenswear. The line, serving as an opening price offering ticketed under brands such as Wrangler. Riders, Brittania and Chic, has been expanded into product categories beyond five-pocket jeans and is "doing great," according to Marc Balmuth, Caldor's merchant president. Several classifications adorned with the Fresno label include shirts, blouses, belts and shoes.

Bullish on private label's contribution to his company's bottom line, Balmuth predicts proprietary items will increase in Caldor's apparel areas.

"Private label. if executed well in terms of style. price and marketing, has been very effective in providing value for customers and better than average margins for the store." Balmuth says.