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By The Numbers

Segal's Secret: More Bang for the Square Foot

Housewares is a $42-billion-a-year retail business," says jeff Adair, editor of Housewares, a trade publication in Cleveland, "where individual numbers are very, very hard to come by. Everybody knows what their competitors do, at least in general terms, but they don't like sharing their secrets with the competition."

On an industry-wide basis, it is no secret that the growth trend is in the direction of the discount houses. According to its recent listing of the top 100 housewares retailers nationwide (see chart), Totally Housewares found 7 of the 10 biggest sales gainers in the discount category -- and only three department stores in the top 25. Supermarkets and drugstores have also become major players in the housewares game; Safeway Stores, for example, boasted 1984 houseware sales of $300 million, and Jack Eckerd did $185 million. Among leaders in other generic outlet categories are: Bamberger's department stores ($65 million); Best Products catalog showrooms ($450 million); Sears Roebuck variety stores ($1.8 billion); Cotter hardware stores ($300 million); and Price Club membership clubs ($125 million).

Although Crate doesn't show up on the charts, last year's revenues of $46 million would qualify it for Totally Housewares' list, well ahead of such department store notables as Bloomingdale's ($38 million) and Marshall Field ($27 million). Plus, as Totally Housewares' survey notes, "There's no indication of such factors as profitability, [inventory] turn, or sales volume per square foot." Translation: Crate's controlled-growth strategy may well make up in quality of sales what it sacrifices in quantity. That growth has been about 20% compounded annually. Nine of the 10 volume leaders averaged an aggregate 25.7% upturn in housewares sales last year, but none were specialty stores concentrating on imported merchandise. Adds Ronald Fippinger of the National Housewares Manufacturers Association, "There's been a great shakeout in so-called gourmet stores. So many of the little retailers can't make it. You walk into Gordon's stores and know he is."

Jeff Adair ventures that, as of a couple of years ago, anyway, sales figures in the $100-per-square-foot range were the benchmark for a successful housewares retailer. Despite his own penchant for secrecy, one number Gordon Segal will disclose is that last year, Crate's stores took in an average $450 per square foot of selling space -- a figure that underscores a longtime contention of his that "if we're not doing three times what the department stores are doing, we're not doing our job."

Nov 1, 1985