Repositioning stores for growth: An interview with the CEO of Surplus Warehouse

It’s a common scenario: Retail concepts are launched that are a perfect fit for a specific time and place. But times change, and retailers must evolve to adapt their strategy to flourish in a more challenging environment.

That’s a situation that E. C. Barton knows well. Headquartered in Jonesboro, Ark., the company operates 62 Surplus Warehouse stores, and 45 Bargain Outlet stores in 15 states. Their locations serve markets from mid-sized cities to small rural towns. Here we talk with Niel Crowson to get his perspective on the challenges his company faces.

 
 
 

Buxton: What sort of growth has E. C. Barton been experiencing over the past couple of years? And what do you anticipate in the near future?

Niel: Up until the downturn of the economy, we were opening a new store each month, so 12-13 each year. When we saw sales decline, we focused inwardly to improve merchandising and improve our existing store network.

Recently we’ve opened new stores in Plymouth, Mass., and Erie, Penn. We’re filling in markets strategically based on our distribution network.

After engaging with Buxton, we’ve relocated a number of stores. For our strategic plan in 2013, we have 8 stores we   plan to relocate. There are a number of reasons we might relocate including size, access to the site, ingress/egress, or poor merchandising, but the relocation is usually driven by the size of the store being too small.

Buxton: Talking about real estate, what do you look for in a site?

Niel: We have cast our lot with Buxton and while oftentimes we’ll get the site assessment back and we don’t agree with it, we respect it and we don’t violate it. That’s the commitment we’ve made.

For Surplus Warehouse and Bargain Outlets we look for a 50,000 population in the city, and 150,000 in the MSA. In most cases we’ve made good decisions, but as the economy has tightened some of those stores haven’t worked so well. We turned to Buxton, and as part of the analysis they put all of our stores into 4 quadrants. We’ve tried to eliminate those that are in poor locations by repositioning those stores. If a store proves to be underperforming, we focus on operations and product mix.

Buxton: Have you seen a sales lift in those stores where you went in and changed merchandise?

Niel: We have definitely seen a sales increase in those underperforming stores which we knew should be performing better.

Buxton: In your opinion, what’s the state of the home improvement industry?

Niel: I think it’s cautiously growing. Sales are up 2-4% which is modest compared to where we were. It’s the first glimmer of a good sign, but with that being said, we’re cautiously optimistic.

Buxton: Here at Buxton we have an entire division dedicated to helping economic development organizations with retail recruitment, so I was pleased to see you’re also involved with economic development – what has drawn you to that type of work in the past?

Niel: I got involved at the local level by being part of the economic development team in Jonesboro. As a result of our success, I was brought in on a state level. I just sum it up by saying “Economic development is the growth engine for all of these communities. If you can provide jobs and opportunities, then the growth will come.”

Journey Awareness Persona C-Suite/Finance Real Estate Retail