Venture overhaul empowers buyers - Venture Stores Inc - part 1

Discount Store News, Nov 6, 1995 by James Mammarella

O'FALLON, MO. -- Venture Stores, fully engaged in a do-or-die makeover, has assigned new levels of responsibility to its buyers. In its push for a category-dominant merchandise mix, previously fragmented businesses are being pulled together under individual buyers or dmms.

In addition, president Wildrick told DSN that Venture buyers now have full responsibility for both sides of the merchandising equation. "The buyer--not a planner or distribution manager--is accountable for the success of replenishment programs," he said.

Wildrick and executive up, merchandising Cal Eller said that Venture has gained commitments from several national brands that will allow the chain to begin "spiking into department stores' pricing levels." The entire 117-store chain will offer assortments of several upscale national brands by the February 1996 deadline for its "Catch the Wave" overhaul.

In their campaign to lift 25-year-old Venture out of the "discount store" trade classification, the executives said that they expected most brand manufacturers to take a wait-and-see approach, but they expect to announce some brands before the end of 1995.

The pursuit of higher-end brands is one aspect of the $40 million makeover that includes an entirely new floor plan, tighter than ever cost control and instock positions, newly empowered buyers and store managers, and a revved-up image campaign.

The wrenching physical alterations are to occur in a 40-day period starting Dec. 26. The tab includes $26 million in capital expenditures and $14 million in expenses. Executive vp, stores Mike Hamilton said that the additional payroll expense alone for the "40 days on wheels" amounts to $3.1 million.

Virtually all of the major changes--construction of feature walls, flooring, wiring, painting, store department layout shifts and fixture installation--will be done during night shifts. Training associates to service a fundamentally remerchandised store is a significant challenge. Hamilton quipped, "Case stripping motor oil is not the same as folding knit tops."

While the effort has taken on aspects of a grand visionary quest, the direction is based on cold financial and strategic facts. Product selections within apparel, home decor and leisure/consumable categories are being drafted based on buyers' recommendations, with merciless scrutiny on margin and turn. In expect, the new merchandise mix is being built from the sku up.

Hemmed in by Wal-Mart, Kmart and Target, but lacking these national chains' resource power, Venture will position itself as a destination store for fewer categories. Increasing soft lines and upgrading the mix while reducing expenses is no secret formula for success. A glance to the Northeast reveals several chains (Bradlees, Caldor and Jamesway) that tried just that--and are now chilling out in Chapter 11.

The roots of Wildrick's decision to leave "discounting" behind at Venture are in the numbers. Upon taking the helm in April 1995, he was faced with first quarter losses he could not alter. Indeed, he saw no way to avert a slump for the remainder of the year.

His first priority was to ensure the confidence of the lending community. Venture's bank syndicate rewrote its covenants, convinced by a detailed financial plan, the chain's solid reputation for execution and "secret weapons" that include a relatively new quality assurance lab, photo and video production facilities and an expandable DC in Texas.

Venture obtained a new $25 million line of credit in August to buttress its $175 million credit facility. Wildrick said that this vital move paid off one month later as Back-to-school volume was notably soft across the industry. Venture was able to point to this cushion and quell factor and vendor concerns.

Meanwhile, Jim Ferstl, Venture's new executive vp, product development and marketing, has led an around-the-clock effort to plan the new prototypes.

At one point, a new Venture store layout was created with each department labeled not by category but by the names of leading examples of power retailers for each product classification. From Bed Bath & Beyond and Best Buy to Victoria's Secret, JCPenney and Lane Bryant, specialty stores, department stores and category killers were studied with an eye to adapting key features and looks. This mix was internally dubbed the "Wildrick Mall."

Ferstl said that Venture will lavish new attention on these departments: Women's Sizes (plus sizes), Petite Shop, Denim Zone, Foundations, Top Shop (mainly knits), Ladies Accessories (will grow from a current 1,800 skus to 2,700 skus), Sport Shop (team apparel), Casual Shop (men's wrinkle-free assortment), Big & Tall, Home Organization (including home office goods), Home Fashion (bed, bath, kitchen and linens), Home Decor (comprising RTA, rugs, lamps, frames and framed art) and Marketplace Venture, which combines food and snacks, household chemicals, pet supplies and HB&C.

The traditional discount store use of the racetrack aisle for promotional pallet displays will be reset. Each of these presentations will be either within or immediately adjoining the merchandise's parent department. With this change, the standard Venture racetrack aisle will shrink from 16 ft. to 10 ft. in width.