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JACKSONVILLE, Miss.-Strengthened by the burgeoning $6 billion retail empire of parent company Saks Inc. department stores (formerly Proffitt's Inc.), McRae's and its core housewares department are reaping the fringe benefits of greater buying power, as it commits to expanding its private-label business.

The 30-store McRae's chain operates upper to moderate level stores in the Florida, Alabama, Mississippi and Louisiana markets. For the most recent fiscal year ended Jan. 31, 1998, the retailer posted $498 million in sales, up 6 percent from the prior year.

And the chain has a new leader at its helm. In November, Travis Saucer was appointed president of McRae's, having held the post of executive vice president of Parisian, another Saks' unit.

At McRae's, home is a key department. "We run a home catalog every month, that's why our home business has been so developed," said Stan Bragg, basic housewares buyer. "A lot of retailers don't do this as frequently."

"Now that we are part of a larger corporate entity, we have the strength to get a lot more opportunistic buys and special programs, such as volume incentives with vendors," said Bragg. He added, "Once [Carson Pirie Scott] came on board in January, it doubled the number of stores for Saks [then Proffitt's]."

With approximately $7.5 million in annual sales, basic housewares, comprised of cookware, cutlery, gadgets and bakeware, accounts for 22 percent of the hard-home business at McRae's. The category has been generating healthy sales figures, posting sales gains of 20.9 percent from last year and 17 percent comp-store sales increases, said Bragg. Better cookware and a push toward private label are the catalysts for the robust gains. "We're going forward with private label in a big way," said Bragg.

By stepping up its proprietary assortment, the chain has found a way to produce healthier margins and differentiate itself in a crowded retail landscape. "Our private-label business exceeded our [sales] expectations," said Bragg. With private label, you can tailor your assortments more easily, [and] it also fills a niche not covered by other resources."

To better control inventory, last July, McRae's restructured its private-label business so that suppliers' warehouse its product domestically. Previously, product was stored overseas by an import company. "The synergies that we put in place came to fruition when private label was rolled out to the entire chain in cookware," said Bragg. "We were previously dealing with import companies, and operated on a feast-or-famine basis."

McRae's will continue to tinker with its private-label assortment. Augmenting its cookware line, Living Quarters, the retailer is broadening the mix from stainless steel to nonstick aluminum. The company plans to roll out its private label to other categories, including bakeware, gadgets and kitchen textiles.

Updated fixturing represents another retooling. "We're changing to metal-rack fixturing: low fixtures used for sets, and taller fixtures for open-stock items," Bragg said. "Before, we had product on parsons tables and cubes and each store had different fixturing -- we're trying to make it more uniform."

Cookware, the lion's share of McRae's core-housewares business, generating 75 percent of sales, is being fueled by upscale assortments. The Calphalon business is up 22 percent over last year, with the professional nonstick line soaring 57 percent over 1997, said Bragg. And the success of better assortments has migrated to other categories. "Upper-end cutlery sets from Henckels and Chicago Cutlery are showing good, steady growth," said Bragg.

As the holiday season typically sends more sweet aromas wafting through the air, bakeware sales have spiked -- buoyed by offerings from Roshco, Metro Marketing and Calphalon -- as have specialty bakeware items, such as Pizza Stones from Roshco, said Bragg.

Novelty items also are performing well. "Fondues have shown a resurgence, as well as popcorn poppers. And in gadgets, the Misto Garlic Oil Sprayer from Liquid Motion is doing well," said Bragg.

He added, "People are spending a lot more time home entertaining rather than going out and eating at restaurants, which has a lot to do with the increase in sales of roasters, fondues and specialty cookware pieces.

"We are bringing in the Telebrands Steakhouse Onion Machine, hoping that it will replace some of the dollars from last year's SafetyCan can openers, another Telebrands product."

Bragg points to the encroachment of specialty chains into McRae's market as a mounting challenge. "I see specialty stores as our upcoming competition; Williams-Sonoma, Rolling Pin and Bed Bath & Beyond are coming into our market more."

Summing up goals for the new year, Bragg said: "We will continue the movement into better cookware, expand our upper-end assortment overall, but still maintain the opening end and moderate price-point business."
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Author:Thau, Barbara
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Dec 14, 1998

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