Ross Stores will double units to 51

Discount Store News, March 5, 1984

SAN FRANCISCO--Newcomer Ross Stores is strengthening its bid for a part in the West Coast off-price apparel action this year by doubling its store count to 51.

The expansion plan will place stores in Oregon, Arizona, Washington and Texas for the first time and add stores in Nevada where there is only one.

Sales for the chain, which grew from eight stores to 26 last year, hit $80 million in the year ended Jan. 31, according to chairman Stuart Moldaw. He predicts a volume of close to $200 million for fiscal 1984.

The ambitious expansion strategy pits the 18-month-old chain against such well-established operators as Marshalls, Mervyn's, Pic-A-Dilly and ClothesTime.

But, an executive at one of those competing chains noted that higher rents being paid by Ross Stores in newer locations could spell trouble for the off-pricer down the road.

The former ladies' sportswear chain was thrown into the off-price field after Pic-A-Dilly founder Stuart Moldaw and Woolworth veteran Don Rowlett purchased the six-store operation for $3 million in the summer of '82.

the two men reformatted the stores to resemble industry leader Marshalls. The assortment was expanded to include men's, children's, domestics, accessories and shoes as well as ladies' clothing.

With a prototype store size in the 30,000-sq.-ft. area--larger than the original 20,000-25,000-sq.-ft. units, the management team plotted a rapid expansion plan typical of the current breed of off-pricers.

For Moldaw, Ross Stores is a third go-round in apparel store launchings. He founded Country Casuals, a ladies' clothing store, and later sold the 17-unit operation to Melville Corp., which renamed it Foxmoor Casuals.

He then launched Pic-A-Dilly stores, selling overruns and irregulars at discounts and eventually sold the 109-outlet chain to Lucky Stores rather than take the chain public. Moldaw is still a partner in the Athletic Shoe Factory, an off-price shoe cgain he helped start after selling Pic-A-Dilly.

Don Rowlett, Moldaw's partner at Ross Stores and president of Ross, had launched J. Brannam, Woolworth's off-price entry, before leaving that chain.

To build a name among the competing off-pricers in the West, 3% of the chain's revenues are spent on television and print advertising, promising consumers savings of 20% to 60% every day.

To support the planned growth to some 80 units by the end of 1985, Moldaw has reportedly admitted he may have to take the chain public within a couple of years.

Sales per square foot at the existing Ross stores now range from $175 to $250, according to Moldaw. He projects sales of $300 per square foot in most units after three years in operation.

The stores' mix of overruns, irregulars and current goods is bought by a team of 16 buyers in New York and three more in Los Angeles. Sales information is gathered at the checkout where where scanning is used for most items.