Canada's Wizmart expands test - warehouse-style discount stores and closeout stores

Discount Store News, Jan 3, 1994

MONTREAL -- Wise Stores, a 127-unit full-line discounter based here, reported it will open more test warehouse-style discount stores and closeout stores, having found both of these test formats successful.

Wizmart, the 107,000-sq.-ft. closeout store that Wise tested in Montreal during the spring, has been expanded to include a 71,000-sq.-ft. unit and a 60,000-sq.-ft. store in the towns of Charlesbourg and Sherbrooke, Quebec, respectively, and other units are expected to open in the near future.

While small closeout stores are operated by other companies, Wise management noted there are no locations anywhere near the size and scope of the Wizmart liquidation store in Canada.

"We believe that this concept is the trend of the '90s," said founder and chairman Alex Wise.

The warehouse-style test, opened earlier this year near Montreal under the usual Wise banner, has been expanded into a second store north of Montreal and company executives said the overwhelming success of warehouse racking in slightly larger stores will lead to the remodeling of several stores to incorporate the new fixturing.

Lionel Wise, executive vp and one of three sons who run the family business with their father, said that the warehouse presentation is "producing 50% to 60% more sales per square foot than the industry average."

The 42,000-sq.-ft. warehouse location is larger than the company's 25,000-sq.-ft. average (excluding the Wizmart locations).

The development and expansion of these new formats follow what would seem an unlikely acquisition in 1992: a 48-unit Wise chain purchasing the 81-unit People's chain from the Canadian subsidiary of the British retailer Marks & Spencer for about $28 million (Canadian). But the acquisition has thus far been a huge success, with '91 sales of $97.4 million and net earnings of $737 million, doubling to $213 million in sales and $17 million in net earnings last year.

The company is optimistic that this growth will continue as its operational and merchandising strategies are implemented in the acquired Peoples stores.

Changes have included a shift from lower margin hard goods to the soft goods emphasis found in Wise stores. High shrinkage at Peoples stores has been brought under control with electronic surveillance tags.

The change in advertising to reflect both chain names has been effective and has lowered the cost of advertising distribution for the combined chains.