Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, August 1, 1993 TAG: 9307300030
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: KNOXVILLE, TENN. LENGTH: Long
Goody's executives think she should. That's why the two Goody's stores that open Thursday in the Roanoke Valley will be chain's first with shoe departments.
The Roanoke stores represent a new look for the Goody's stores and the company's move into larger markets. Also, it's the first step toward "saturating" Virginia, a company executive said. Already, Goody's is looking for sites in Lynchburg.
Because the 2-year-old Goody's at Market Place in Christiansburg is expected to share customers with the Roanoke stores, it also is getting footwear.
Shoe departments and self-serve shoe displays will be set up in 40 more of the chain's 135 stores by October and 80 more in January, said Randy Mullins, vice president for store operations at the Knoxville-based chain.
Last year, the company added lingerie to its inventory. Beginning now, more attention will be given to children's and youth clothing, he said. "Goody's is becoming more of a full-line apparel store," said Mullins.
But it's also sticking to its claim that it sells name-brand merchandise at prices 10 percent to 20 percent lower than the competition. In Roanoke, the competition is mostly Leggett and J.C. Penney stores, Mullins said.
Mullins said shoe departments will not be the only difference at the Tanglewood Mall and Crossroads Mall stores.
For example, square, center-of-the-store checkout counters have been replaced by multiple checkout lanes, which are thought to be faster and more efficient. Aisles are wider to accommodate baby strollers.
The Roanoke stores are numbers 132 and 133 for the fast-growing company, among seven stores it will open between Wednesday (in Columbia, Tenn.) and Aug. 12 (in Martin, Tenn.)
The family-owned company that went public in October 1991 expects $500 million in sales this year. The goal for someday not too far away is $1 billion in annual sales, says Robert Goodfriend, the company's 43-year-old chairman and son of its founder. He expects to get $10 million in sales from the Roanoke Valley stores in their first year.
There are Goody's stores in 13 states and for a long time they have been familiar sights in small communities such as Norton, Va. The company is now on a growth track that is taking to communities with more than 100,000 people. Roanoke represents a major step, Goodfriend said. Next spring, an even bigger step will be taken when six stores are scheduled to open in Birmingham, Ala.
"Everybody is excited about the growth goal," said Mullins.
To accomplish it, Goody's wants to provide whatever meets the apparel needs of a 25- to 55-year-old female with household income of $25,000 to $50,000 - its target customer.
Those are the same customers everybody wants, but Goody's thinks it can capture them by continuously bringing in new merchandise, keeping prices moderate - a $30 shirt instead of a $40 one, said Mullins - and always listening to customers.
"We take customer comments very seriously," said Mullins.
He said the change to checkout lanes was a reaction to customers. So is a new 30-day return policy that today replaces the current 10-day return policy.
"We're pretty aggressive marketers," said Joe Elles, Goody's new vice president for merchandising. "Like Chinese water torture, we plan to keep coming at customers."
"If it's good today, it's going to be changed tomorrow," Mullins said.
The Roanoke stores - in a long-vacant spot on the upper level of Tanglewood Mall adjacent to Penney's and at Crossroads Mall near Kmart - are third generation stores, Mullins said. The company's stores have been redesigned three times in the past seven years.
Each new design has had more open space than the previous one.
For instance, in the Roanoke stores dressing rooms have been placed in corners of the store rather than carved from valuable display space. More clothes are displayed on wall hangers and floor displays in front of them have been spaced to give a shopper a better view of the wall items and more access to them.
Other touches in the third-generation stores, such as wood floors in the jeans display area, give them a more upscale look.
The Goody's company describes itself as a "value merchandiser" that looks like a specialty shop, but even Chairman Robert Goodfriend confesses that the company has not done enough to sell that image. That will change, he said.
Goody's used to be Athens Outlet Stores, which sold factory seconds or irregular clothing. In 1981, Goodfriend, who had taken over the company in 1977 from his father, renamed it and began specializing in first-quality, name-brand merchandise. The stores' labels now include such brands as Bugle Boy, Alfred Dunner, Norton McNaughton and Duck Head.
The company has three private labels - Ivy Crew, GFC and Authentic GFC - but says it will keep the private label mix to no more than 15 percent of its total merchandise. Despite private labels generally yielding higher profits for retailers, Goody's marketing strategy is name brands for lower prices.
Currently, denim accounts for 22 percent of Goody's business; ladies clothing, 45 percent;, and men's, 25 percent. The remainder comes from children's.
However, the mix will begin to change soon and rapidly to include more youth wear, said Joe Elles, who joined the company last month.
Elles previously was executive vice president and general merchandising manager for sales, marketing, visual and product for Lee Apparel Co., a division of VF Corp. Lee jeans are the company's second highest selling denim label.
Elles, one of two VF executives hired by Goody's recently, said he also will add more brands to the stores.
"We want to be the family store," Elles said.
He said new brands will be in the stores by the holiday season, which for Goody's begins the Sunday before Thanksgiving.
Goody's stores have to maintain high sales volume because its markups generally are lower than those of specialty retailers, said Mullins.
To capture customers' attention, the merchandise inventory is "turned over" at least five times a year, Mullins said.
More than 99 percent of the 36 million units of merchandise shipped to stores annually comes from the company's 226,000-square-foot distribution center in Knoxville. It's carried by the company's 25 tractor-trailers.
The center uses a combination of high-tech and old-style systems to move goods, said Mike Bryant, director of distribution.
Some merchandise comes off the trucks onto a conveyor, is immediately keyed into a computer and then sent through a system of conveyors for tagging and repacking for distribution to the stores.
The center works 225 people in two shifts. They process about 180,000 pieces daily, Bryant said.
He said the center averages five deliveries per store in a two-week period.
Bryant said the time it takes to get goods from a vendor to its stores is a strength of the company and is what allows it to stay current in its fashion offerings.
For example, Bryant said it is possible for Goody's to have goods shipped in New York on Monday, processed in Knoxville on Tuesday and in the stores by Wednesday.
Goody's also is beginning a quick response program with the Lee jeans manufacturer in which it will ship reorders packed for specific stores instead of one mass order. This will eliminate some of the packing and repacking required to process jeans.
Currently jeans are handled five times between receiving, tagging and getting them onto the stores' display floors, Bryant said.
Denim, especially jeans, is one of Goody's promotion items. It boasts that it can sell its jeans for less than any retailer. An April article in Forbes magazine referred to denim as Goody's "bait." For example, the magazine said, Goody's most popular item, Levi's 550 jeans, are priced at $30, compared to $39.99 at other stores. (Leggett had Levi 550 on sale for $34.99last week, but its regular price is $39.99.)
The company's arrival in Roanoke has not gone unnoticed by other retailers, but they haven't said they will lower any prices to match the new competition. In fact, a Leggett official said he had nothing to say except that "Goody's is a good competitor."
At Tanglewood Mall, Phil Boggs, manager of the Penney's store, said he's glad to have a tenant in the space that's been boarded up for the past three years next to his upper-level entrance. Having more customers walking in that area can only benefit his store, he said.
However, Boggs has used the arrival of Goody's as an opportunity to fancy-up Penney's upper level entrance, and it's no accident that jeans are prominent in the new display.
The Goody's at Crossroads is 3,800 square feet smaller than the Tanglewood store and almost by itself as an apparel retailer in its location. Kmart is nearby.
Goody's entrance into Roanoke has been conspicuous beyond its retail potential. A billboard across Virginia 419 from Tanglewood Mall calls for consumers to boycott the company. The Amalgamated Clothing and Textile Workers Union put up the billboard as part of a national boycott of Goody's stores that began last November. The union says Goody's is not bargaining in good faith to negotiate a contract between the union and Goody's distribution center workers.
The center's employees voted for union representation in January 1992.
A union spokeswoman said last week that it will have a news conference Tuesday with Roanoke Valley union leaders and that it will hand out leaflets supporting the boycott at the Goody's stores on their opening day.
Goody's president Roger Jenkins said he can't understand how "hurting the company's business will help employees."
"We clearly are unhappy and feel badly that the union has taken to tactics like boycotting, picketing and distributing signs that inaccurately depict the situation," said Jenkins. "We are negotiating in good faith with the union toward a contract. We feel very good about the success we are having in that endeavor."
Each Roanoke store will have 35 to 40 full- and part-time employees. Rebecca Collins, a Morristown, Tenn., native who managed the recently closed Hess's Department Store in Christiansburg, is running the Tanglewood store. Barbara Hayes of Fairmont, W.Va., is manager at Crossroads.
The two have been in training since April, first at company headquarters and then at the Christiansburg store.
Randy Mullins said some employees spend longer in management training than others depending on when new stores are opened. The company is growing so rapidly however, that this year it has more new stores opening than it has people in training, he said.
by CNB