With a focus on national and private brands, and in-store shops, Goody’s new president wants to upgrade the retailer’s image from small-town discounter to mainstream American fashion choice.
Goody’s, the 385-store chain based in Knoxville, Tenn., was bought by a private equity firm, GMM Capital LLC and Prentice Capital Management, last January. Mary P. Kwan, a former senior vice president at Quiksilver Inc., where she led merchandising and design for the Roxy juniors brand, was named president of Goody’s in October, replacing Fred Mershad.
Kwan said she wanted to make Goody’s as chic as a moderate retailer serving small markets can be.
“We know we won’t be a Seventh Avenue fashion house,” she said. Goody’s has stores in 21 Southeastern and Midwestern states, and targets towns with populations of 100,000 or less, and household incomes ranging from $40,000 to $75,000. “But we can be a style adviser, with great brands in shop-in-shop presentations instead of cluttered racks of key items.”
The new strategy, to be completely rolled out in the first half of 2007, includes expanding private brands from 30 percent to 50 percent of inventory.
Goody’s wants to add national name brands such as Columbia Sportswear, Izod and Arrow men’s shirts. It will expand its private brand program of existing labels Duck Head, Mountain Lake and Goodclothes, and develop or acquire new ones.
Goody’s opened a fashion office on Fifth Avenue in Manhattan this year, where 10 staffers oversee Goody’s fashion direction and product development. The New York fashion office will provide direction and product development. Knoxville will remain headquarters for Goody’s, which employs 10,000 people.
The retailer will launch a private brand of women’s contemporary sportswear, a new category for Goody’s, in the second half of next year. The line will include a celebrity tie-in or endorsement, Kwan said. Other contemporary programs will include new matte jersey sportswear collections, designed for work, play and evening, and high-tech performance fabrics specific to the contemporary market.
The push for contemporary is part of an overall focus on women.
“Our women customers are our whole focus,” said Kwan, adding that Goody’s would grow children’s and juniors, family categories that are also purchased by women. “We want to make the shopping experience convenient for the modern woman shopping for her family.”
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Denim, at 18 percent of total sales, will continue to be a key category. Duck Head is the largest denim brand; others will be Levi, Lee, Union Bay and juniors lines L.E.I. and Mudd.
In the first half of 2007, Goody’s stores will get facelifts, and new shops-in-shops will be refigured, by brands, with fresh paint, displays and new visuals and signs.
“Just as important as the brands is to make the shopping experience entertaining and compelling,” Kwan said.
To compete with bigger moderate-price retail competitors such as J.C. Penney and Kohl’s, Goody’s will play up its strengths as a smaller-footprint, home-town store. Mining a customer database of 8 million people, Goody’s plans to develop customer loyalty through frequent-buyer programs, direct mail and community events.
In November, Goody’s hired the Richards Group, a Dallas ad agency with retail and restaurant clients such as Zales, Home Depot and Atlanta fast-food giant Chick-fil-A. With a new ad campaign set to roll out in the spring, the Goody’s brand message emphasizes fashion as much as price, and builds on a hometown emotional connection with customers.
“Price isn’t enough of a distinction anymore, and cheap without the chic is not the future for Goody’s,” said Diane Fannon, principle, the Richards Group. “We want to make Goody’s into a fashion leader, within the boundaries of the communities it serves.”
Fannon said the new campaign would include broadcast and print media, localized freestanding outdoor advertising and traveling fashion shows.
To compete with bigger retailers, Goody’s ads have to be highly creative, she said. “A challenger brand like Goody’s will always be outspent in advertising by a Kohl’s, so we have to make it creative, catchy and appealing,” Fannon said.
Sales for 2006 should be flat with 2005 sales of about $1.2 billion, Kwan said, although profits are up as a result of better inventory management and cost control.
“We’re taking the next 12 months for sustainable, moderate growth before we expand and open new stores,” Kwan said.