Overstock retailer to open its first Eugene store today.

Byline: Ilene Aleshire The Register-Guard

Michael Potter's mother and two brothers won't have to drive to Albany anymore to see examples of his handiwork. The chief executive of discount retailing chain Big Lots is opening his first store in Eugene today.

"I love Eugene and I've wanted a store there for a really long time," said Potter, 43, who grew up in Lebanon and graduated from the University of Oregon in 1983. His mother, DeLoris, and brothers Richard and William, both attorneys, still live in the Eugene area.

For years, Michael Potter said, "My mom and my brothers have been telling me they need a (Big Lots) store there."

The big challenge in many cities, including Eugene, is finding the real estate, Potter said.

"We don't build our own sites; we lease second- or thirdhand. We try to make our operations as inexpensive as possible, and pass the savings on. We think we found a real good (site) in Eugene."

The store is in a former Albertsons at 1960 Echo Hollow Road.

Big Lots, based in Columbus, Ohio, is what analysts term an "extreme value retailer." When a product line is discontinued, for example, or when packaging changes, or when a factory overproduces an item, Big Lots swoops in, buys those products from the manufacturer cheaply, then resells them to the public.

The 1,400-store company focuses mainly on housewares, electronics and furniture, but also carries some food and clothing, including staples such as underwear. It also has special sales from time to time, such as a current one on Levi's jeans, Potter said.

The Eugene store will carry only ready-to-assemble furniture initially, but plans to add more furniture - including mattresses, sofas and dining room sets - by June or July.

Part of Eugene's attraction was the university, Potter said.

"We tend to do well in university towns," he said, because of the number of students who are looking to cheaply furnish rooms or apartments. "What we've found in all our studies, on a broad basket of goods, you'll save 20 to 40 percent over discount stores ... and well over 50 percent compared to traditional re- tailers."

The company's core market is low- to middle-income shoppers, Potter said, but it really aims for anyone who wants to save money.

"Close to one-third of our customers are in the higher-income group. They love to bargain shop, too. Maybe that's how they got to be wealthy."

Last year was a tough one for the value retailers, and some analysts, including PiperJaffray, said they were cautious about the outlook for Big Lots this year. They noted store traffic was down and the company's earnings came in at the low end of its projections in December.

Potter said the sluggish national economy and higher gas prices hit his company and its competitors. Some studies estimated that higher gas prices alone took about $10 per week out of the average consumer's wallet, he said.

"That has clearly been something that put the wind at our face this past year," he said. But he added that he's optimistic because of actions the company has taken, including increasing the quality of its merchandise - it deals with more than 3,000 manufacturers - upgrading its employee base; and improving its stores with better signage, lighting and housekeeping.

Key deals are positioned in a special closeout section of the stores, and some of the best bargains on merchandise are found at the ends of aisles, making it easier for customers to find them, Potter said.

With giant retailer Target leading the trend, it's become fashionable to shop where you can save money, he said. "It's not as important for customers any more to brag about how much they spent."

As the result of mergers, Big Lots now has the size to negotiate with a wide variety of manufacturers, said Potter, who became CEO of Big Lots in 2000 after working first for branches of the May Company. He joined what is now Big Lots in 1991.

The company operates in 46 states, according to its Web site.

Potter anticipated further growth for the company, including a store in Springfield.

"We would definitely like to find a Springfield (site)," he said. The company may even open a second one in Eugene, he said. "Depending on the market, we can have (stores) even within three to five miles of each other."

Potter derives particular satisfaction from the company's latest expansion in Oregon. Although he was born in Minnesota, his family moved to Lebanon when he was 8, and he still considers the area home, he said.

Last year, he announced that, in fact, that he would be transitioning out of his job as Big Lots CEO, a job that paid him more than $1 million in 2003, plus stock options worth another $2 million to $6 million, according to the company's most recent proxy statement.

He wants, he said then, to move his family back to the West Coast.

CAPTION(S):

Big Lots, which sells overstock merchandise, will open today in a former Albertsons at 1960 Echo Hollow Road.