Cost Plus Positive on Turnaround Bid
Staff Staff -- Furniture Today, October 1, 2007
The back-to-basics turnaround campaign at specialty retailer Cost Plus World Market is on track, the company said at its analyst day presentation last month.
"We have exited the collection business," said Barry Feld, president and ceo, emphasizing that the company's original retail model works better: "We are an item-driven business."
"We were a discovery store," Feld said of the company's origins as a treasure-hunt retail concept on San Francisco's Fisherman's Wharf in 1958. He noted that by holiday 2004, "We completely walked away from that, to become a mediocre furniture store."
The new focus returns to the original idea: "high-value, high-velocity items," said George Whitney, svp merchandising.
The Cost Plus mix, Feld mentioned, includes 80% non-furniture items. A total of 40%, he said, is consumable goods, including exotic wines. The store currently offers a range of home textiles from table linens to bedding, with nearly all price points below $120.
Cost Plus saw 2006 sales climb 7.2% to $1.04 billion, but comps fell 3.3%. The company recorded a net loss of $22.5 million for the year.
In response to an analyst question where it was suggested that Cost Plus stock is undervalued, management emphasized that the company intends to remain publicly traded, taking a position that will not even be reviewed for two years.
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line