The Dry Goods: prototype's image fits product mix - off-price apparel chain; includes related article on history of the chain - company profile

Discount Store News, Sept 26, 1988 by Donald Longo

The Dry Goods: Prototype's Image Fits Product Mix

DEPTFORD, N.J. -- The Dry Goods, a chain of eight off-price apparel stores based in Aston, Pa., embarked on a "new era" in its 64-year history with the opening here last month of an upscale prototype store.

"The Deptford Dry Goods will be the department store of the 1990s," said George Nadel, chairman of the privately held chain, which rang up more than $85 million in sales during 1987.

The 70,000-square-foot prototype, the fashion anchor in a new 250,000-square-foot strip shopping center development about 10 miles south of Philadelphia, sells current name brand merchandise at prices 20 percent to 50 percent below traditional full-markup department stores.

Yet, the mostly carpeted prototype maintains an upscale, department store-like ambience through dramatic displays, modern fixtures, department store-trained employees and a focus on lifestyle merchandising.

Nadel, 45, chaiman, told DSN at the Aug. 24 grand opening that they expect the new store to generate annual sales of about $12 million. "Its progress will be carefully monitored because we expect this store to be the prototype for an aggressive future national expansion program."

While no official timetable for expansion has been laid out, Nadel estimated that the company would probably be able to make a decision on future growth possibilities by the end of this year. New stores following the prototype format could open in 1990.

The Deptford store is the first opened by Nadel since he purchased the chain in 1986 with an investment group consisting of Oppenheimer & Company and the Equitable Life Assurance Company. Previously, Nadel worked for Lane Bryant, a division of The Limited, and was a vice president at Cohoes, the women's wear specialty chain.

Since the acquisition, the new owners have brought in a new merchandise management team headed by vice president and general merchandise manager Barbara Davis, a former senior vp and gmm at Caldor, the full-line discount department store chain. Other merchandisers were recruited from such retailers as Gimbels, John Wanamaker, Macy's, The May Company and Federated Department Stores.

The new management team is attempting to position the chain between off-pricers like Marshalls and loehmann's and full-price department stores. The new Dry Goods flagship features at discount prices brands names such as:

* Coats by J. Hook and J. Gallery;

* Petites by JH Collectibles, Leslie Fay and Russ;

* Lingerie by Jennifer Dale and Escapades;

* Juniors fashions by Gitano, Bugle Boy, Calvin Klein, Hang Ten, Palmetto, Currents and Camp Beverly Hills;

* Women's wear by Liz Claiborne and Rafaella;

* Children's wear by Oshkosh, Buster Brown, Healthtex and Carter's;

* Active sportswear by Puma, Nike and Adidas.

"The difference between us and stores like Marshalls, Loehmann's and T.J. Maxx is that we strive for all current merchandise," said Davis. "And, they don't present the goods in a department store environment."

Department store touches are evident in The Dry Goods' utilization of wall space, modern-looking mannequins, and high tech fixtures to display merchandise. Three-tiered platforms and cubes in several deprtments are familiar components of specialty stores like The Gap.

"The Dry Goods now has a fashion character to go with its fashion merchandise," commented Keith Kovar, director of New York-based The International Design Group (USA), the firm that advised the retailer on its redesign strategy.

The pricing philosophy is main floor-to-moderate price points. "We want to cater to Middle America," said Davis. "The majority of our merchanidse will sell at between $20 and $40. The fringe is the $40 and up customer."

Nadel said the chain has had no problem sourcing merchandise to fit the chain's new image. The executive attributes the company's sharp pricing to its lower cost structure in comparison to full-price department stores.

The Dry Goods' site selection strategy is to locate stores on less expensive real estate near major malls. The Deptford store is about one mile from the Deptford Mall, with John Wanamaker and Macy's.

The company's major competition comes from department stores and discounters, including K mart, Ames and Bradlees.

Even though the store places greater emphasis on instore service than the typical off-pricer, there are no departmental cash registers. Rather, central checkouts are located at the front of the store. Like a discount store, The Dry Goods customers push shopping carts along the store's wide aisles.

Also contributing to productivity savings are a new point-of-sale price lookup system and a recently opened distribution center in Swedesboro, N.J., that ships merchandise to the eight Dry Goods stores. Besides Deptford, other units are in Dover, Elsmere and Claymont, Del.; Cherry Hill and Vineland, N.J.; and Springfield and northeast Philadelphia, Pa.

This spring the older units will begin to be retrofitted to the new format, which divides its mix between apparel (85 percent) and soft home fashions, such as household linens, bedding, bathroom and window dressings (15 percent).