New Clover prototype ideal for smaller areas - Clover Apparel Inc

Discount Store News, April 1, 1991 by Richard C. Halverson

New Clover Prototype Ideal for Smaller Areas

LANSDALE, Pa. -- Clover has opened a new smaller prototype store designed for less populated markets.

At 70,000 square feet, the prototype, which opened last month outside this town north of Philadelphia, runs about 18% smaller than Clover's standard 85,000 square feet. But in layout, the new unit is identical to its larger cousin, said Warren White, general manager of Clover, the discount arm of Strawbridge & Clothier.

The number of offerings has been cut by about 5%. The new prototype also eliminates a couple of checkouts and reduces storage space, White said.

Departments around the perimeter of the store, such as shoes, sporting goods and toys "remain pretty much the same," a Clover merchandiser said. Much of the selling space reduction comes in departments within the center or the racetrack, children's and junior apparel, domestics and home decor.

The new store is Clover's 25th. It will be the only new store for 1991, but the chain expects to open two in 1992.

Peter Strawbridge, president of Strawbridge & Clothier, said during a grand opening interview that Clover has filled in the inner perimeter of the eight-county market around Philadelphia.

"The smaller store will require about 160 employees, compared to about 225 for a full-size store. Clover is retaining the full-size prototype for appropriate markets.

In sporting goods, Clover has squeezed in six activewear apparel four-way racks to display merchandise such as 100% basic cotton T-shirts from Lee. For the grand opening, the on-ad price was $3.99, down from $5.99 everyday.

New Racking is Added

The new racks reflect more concentration on sporting goods apparel, said Jeff Gleiser, divisional merchandise manager for sporting goods and other hard lines.

Also in apparel, Clover is continuing efforts to upgrade apparel, taking on more of the same lines that Strawbridge & Clothier carries, such as Object D'Art cotton sweaters for juniors at $24.99, or about 25% less than at its department store parent.

Clover expects the new store will somewhat cannibalize sales at its existing store at Center Square, about a 15-minute drive away.

The closest discount store competition now is from an older Ames store in Lansdale, about six miles away.

Bradlees is the major competitor in the market that Clover dominates, said Terrence McEvoy, analyst for Jamey Montgomery & Scott.

"The smaller store wil lbe more productive," he said.

As a family controlled, though public corporation, Strawbridge & Clothier refuses to break out Clover's sales and operating profits. But McEvoy estiamtes that 1990 sales rose 3% to around $400 million to $425 million. Because Clover openen only one store last year, same store sales gains were about the same as total sales.

Along with profits of its department store brethren, Clover's operating profits plunged last year to $15 million, McEvoy estimated. Clover's operating profit margin was about 3.6% of sales in 1990, he said.

Last year was an especially difficult one. But the analyst expects Clover to rebound this year.

For Strawbridge & Clothier as a whole, net profit margin was about 1.8% in 1990, McEvoy said. He estimates that net profits skidded to about $2 a share in 1990 from $3.41 per share in 1989.