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Rack Room Shoes putting best foot forward

By Donald Finley

Rack Room Shoes has entered the 21st century with a bright new store design and a new vision for the off-price chain of 327 units — where customers can still shop for brand-name footwear right off the racks.

Rack Room also plans an aggressive expansion program over the next two years, with up to 40 stores opening this year and at least 40 more next year as the company moves westward.

Sixty of Rack Room's units are already in outlet centers and value malls, and the company expects some of the new stores will also be in those types of projects, said Dave Osterhus, director of real estate for the Charlotte, N.C.-based retail chain. Rack Room is a subsidiary of the privately owned Deichmann Group, a shoe company based in Essen, Germany.

The prototype store in the new concept, called Rack Room Shoes MetroMart, opened in 8,652 square feet of space in Concord Mills near Charlotte, N.C., when that 1.4 million-square foot Mills Corp. value megamall opened in September 1999.

Other units have since opened in an 8,000-square-foot space in Katy (Texas) Mills, which opened in October, and in 15,000 square feet in Valley Crossing Shopping Center, a strip center in Hickory, N.C., in November.

"MetroMart has its roots in the warehouse look, but adds lifestyle photography, bright colors and lots of product to help make shopping fun," said Paula Wagner, director of store design for Rack Room.

"Capitalizing on the trend to pare down to base materials, the new MetroMart environment communicates 'city style' with a no-hype philosophy," she said. Messages are clear and straightforward with honesty about real savings and quality credibility.

"For the new millennium, we needed to step up with a new look with bright signature colors and powerful graphics to lure customers over the threshold," she said.

Wagner led a four-person Rack Room team that designed the new store decor. She said that as a result of the company's market-trend research, Rack Room "created a consumer-focused concept that projects an exciting image in the marketplace.

"Our research shows that customers want less hype. They prefer a clear message as to prices and styles in a bright, well-organized space that is easy to shop," she said. "We want to give a casual, warehouse look that's not overly dressed. We want to be honest and give the impression that 'you're not paying for the store's looks.'"

Orange is the dominant color in the new design and has become the signature color for the new concept.

"A dramatic orange architectural cylinder, suspended over a central feature area, illuminates the shoes from the entrance," she said. "This focal point draws the shopper into the store and gives a memorable image to recall when deciding where to shop for shoes. The men's, women's and children's departments are each color-coded, using both signage and floor treatments, to easily lead customers to the product."

The mostly orange fixtures and shoe racks were designed to create an image for Rack Room Shoes, Wagner said. Orange metal end caps are in arcs, similar to one-half of McDonald's arches. The fixtures were designed and provided by David Skrzelowski of Cincinnati-based Object 4.

"This is our proprietary motif, with all the fixtures speaking the same language and contributing to the overall identity and brand image of the store," Wagner said. "This image stands for national-quality brand selections at value prices. In fact, our tag line is 'The Big Brands! The Big Savings!'

"The MetroMart name was chosen as a positioning piece for us in the marketplace," Wagner said. "'Metro' said we are a city style, which translates to hot looks and hot brands. 'Mart' means we offer value prices."

The cash wrap in the new design (although not at Concord Mills) is a half circle near the front entrance that repeats the orange arc motif.

"We have added to the warehouse feeling with an open ceiling [22 feet high] and industrial lighting, with high-intensity discharge lamps that hang from the ceiling at 14 feet," Wagner said. "Also, we are using a valance of corrugated metal at lamp level around the walls of the store."

The MetroMart store design contrasts sharply with that of the other stores in the Rack Room Shoes chain, which feature teal as the dominant color. "That design [in the older stores] is more generic and not very memorable, and provides no strong identity in the marketplace," Wagner said.

Osterhus said the older stores may eventually be redesigned with some, but not all, of the elements in the MetroMart units.

"Rack Room Shoes is now positioned to take advantage of the consumer's lifestyle," Osterhus said. "Our customers don't have time to waste. Rack Room Shoes is designed for quick and simple shopping. The product is there for you to see." He added, however, that customers can ask for help from sales associates.

Each Rack Room Shoes MetroMart store carries more than 17,000 pairs of men's, women's and children's dress, casual and athletic shoes, including well-known brands such as Adidas, Aerosoles, Candies, Dexter, Keds, Mushrooms, New Balance, Nike, OshKosh, Reebok, Rockport, Sam and Libby Kids, and Timberland, he said. The stores also sell accessories, such as handbags, socks, backpacks and shoe-care products. Rack Room also carries some of its own private-label footwear made by national-brand manufacturers.

Prices are up to 30% less than regular retail, and the target shopper is middle-to-better fashion-forward, cutting across all ages, according to Osterhus.

Rack Room stores are in 19 states in the Southeast, Mid-Atlantic and Midwest areas, as well as Texas. Although Rack Room has crossed the Mississippi River only in the past two years, its expansion plans include a steady move toward the West Coast.

The old-format stores range from 4,500 to 6,000 square feet and average 5,500 square feet.

For the new MetroMart units, Osterhus is looking for spaces of 7,000 to 10,000 square feet with a minimum of 65 feet of frontage, in fashion-focused outlet, value and full-price venues. Good visibility, easy access and sufficient parking, and store sites in main concourses close to other fashion tenants, are preferred.

Rack Room opened 20 new stores in 1999, including the three MetroMart units.

Rack Room Shoes was founded in 1920, in Salisbury, N.C., and was purchased by Deichmann in 1984. Deichmann operates about 2,000 shoe stores in five European countries and the United States.