Best's catalog emphasizes service: Home office offerings widened, hardware dropped - Best Product Company Inc

Discount Store News, Nov 5, 1990

Best's Catalog Emphasizes Service

RICHMOND, Va. - Best Products has distributed a larger, 404-page catalog that spotlights its customer services while refinancing the $175 million bridge loan that played a key role in the leveraged buyout of the company two years ago.

The new catalog, 72 pages larger than last year's book, uses two up-front pages to highlight such customer services as guaranteed lowest prices, 30-day return policy, five-minute delivery of orders in showrooms, mail order service and Dial-and-Drive whereby customers can place a phone order for later pickup at a store.

The focus on customer service reflects Best's effort to differentiate itself from both catalog and traditional retail competitors. The emphasis is on making shopping at Best a pleasant experience with the cataloger offering the best price/value relationship to customers. This was the message in president Stewart M. Kasen's letter on the inside front cover in which he declared that "we are totally committed to your complete satisfaction" and cited Best's faster service, expanded selection and lower prices.

In the all-important price war, Best's ammunition are two guarantees of low prices. It will match a competitor's lower price for 30 days after a customer buys an item and will refund the difference if it advertises a lower price within 30 days of a purchase.

The book also mirrors the merchandising changes Best carried out at its 195 showrooms: * Home and office furniture, a major new department in the showrooms, has been expanded into a 21-page section that ranges from tray tables and kitchen stools through office centers and computer hutches to rattan dining tables, club chairs and sleep sofas. * Auto accessories and hardware have been dropped from both the stores and catalog. * Guns, de-emphasized in the showrooms with the elimination of gun counter displays, have been reduced to one page of just air guns. * The book's toy focus is on video games, and juvenile and educational toys which are carried year-round in the showrooms. Other toys are merchandised seasonally and aren't even included in Best's new prototype being tested at four Houston locations.

Refinancing the bridge loan involved extending the maturity date of $142 million of senior subordinated notes to June 1992 and converting $33 million to senior notes maturing no earlier than January 1994.

The bridge loan was the major short-term financial instrument in Adler & Shaykin's $1.1 billion leveraged buyout of Best in November 1988.

Separately, Best obtained a $30 million line of credit commitment from the Equitable Life Assurance Society to supplement existing short-term credit lines.

The refinancing of the bridge loan and additional short-term credit were called "very positive developments" by Jerry E. Goldress, Best Product's chairman and chief executive officer. They offset the cataloger's "disappoint [ing]" results in the second quarter and half-year periods which ended Aug. 4.

Sales in the quarter increased 3.1% to $442.8 million from $429.6 million, while the net loss jumped 23.7% to $33.7 million from $27.2 million. In the six months, volume went up 3.6% to $850.7 million from $820.9 million while the net loss declined 3.8% to $59.9 million from $62.2 million.

Goldress said that "recent changes in our merchandising assortment coupled with increased credit availability have the company well-positioned for the all-important Christmas season."