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Shopping Centers Today -> June 2003
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FITTED TO A ‘T’
Customer service, including T-shirt alterations, sets The Buckle apart
BY MAURA K. AMMENHEUSER
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How do you define service? Well, how about this: It’s when a store offers to cuff your jeans and alter your T-shirt — for free.
Alterations? At a jeans-and-Ts shop? The Buckle offers that, plus brands. Buckle is a Kearney, Neb.-based, 310-store chain selling moderate-to-high-priced jeans, tops, skirts, shoes and other casual apparel and accessories. Like many clothing retailers, Buckle woos young, fashion-conscious consumers, mostly to stores in regional malls and also over the Internet.
“Our philosophy is providing the best selection and the best service, and part of that is [understanding that] different brands of jeans will fit differently,” said Brett Milkie, Buckle’s vice president of leasing. “Probably 90 percent of what we do is taking the hem up.”
Buckle also offers year-round free gift wrapping, layaways and a frequent-shopper reward program.
“What malls and shoppers like about The Buckle is the selection and service we have in the store,” Milkie said. “We’re different from our competitors in that we carry brands. … There’s a lot of selection you won’t find in the shopping centers.” Buckle peddles Billabong, Candies, Dr. Marten, Fossil, Lucky, Quicksilver, Silver and more, plus some private-label items.
But it’s the staff that really sets Buckle apart, according to several landlords.
“They have great employees,” said Karla Woodward, SCMD, assistant manager at Newgate Mall, a 700,000-square-foot center in Ogden, Utah, where Buckle operates a 5,000-square-foot store. “They’re always working. There’s none of the standing around chatting.”
Buckle sales clerks are gregarious, well informed and paid on commission, said Lee Peterson, executive director of WD Partners Design Group, a Columbus, Ohio-based brand-consulting firm. “They will tell you the history of the clothes,” or at least suggest what items pair well, he said. Company executives, several of whom have been with Buckle for nearly 30 years, say they “want to be friends with the people who come in,” said Peterson. “And they really mean it.”
Managers are promoted from within and undergo a six-month training program, sometimes accompanying buyers on purchasing trips, Milkie says. The result: employees with sophisticated knowledge of their product and customers.
“They do a great job,” said Jim Bendickson, general manager of the 400,000-square-foot Palouse Mall, Moscow, Idaho, which includes a 4,500-square-foot Buckle. Their managers are “very aggressive and ambitious” about marketing, he said, and enthusiastically participate in mallwide promotions and events.
Buckle is not a household name in much of the United States, owing to its conservative growth philosophy and, until recently, a reliance on rural markets. But the company is anything but new.
David Hirschfeld started the company in 1948 as a men’s store called Mills Clothing. His son, Dan, took over the company in 1965 and bought another shop, Brass Buckle, two years later. By the early 1970s, Brass Buckle was concentrating on denim and other casual wear. In 1991 Dan Hirschfeld, who is now chairman of the board, renamed the chain The Buckle and took it public in 1992.
Buckle’s growth has been steady. For the fiscal year ended February 2003, overall sales reached $401.1 million, 3.5 percent better than fiscal 2001’s $387.6 million and up 44 percent from five years ago.
But despite the chain’s expansion (as of April, it had 310 stores in 37 states, up from 295 in February 2002), same-store sales slipped 0.5 percent for the most recent fiscal year. They also fell 6.2 percent in 2001 and 6 percent the year before that, after having eked out a 0.9 percent gain in 1999. Sales per square foot, meanwhile, which the most-recent data say averaged $279 in fiscal 2001, dropped from a high of $344 in 1998.
These sales drops are a concern, said Howard Davidowitz, chairman of New York City retail consulting firm Davidowitz & Associates. He questions the wisdom of relying heavily on brands. Most specialty stores have switched to private-label merchandise to have greater control over costs and distribution while being less vulnerable to the changing whims of fashion. “[Buckle] is trying a formula which no one else wants to do,” Davidowitz said.
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Milkie blames the chain’s comp-store sales slide on an increasingly competitive environment. “There’s been a tremendous influx of competition” over the past five years, he said, with other chains targeting 12-to-25-year-olds. Previously, a city of 50,000 people had maybe two or three competing stores, he noted. Today, apparel chains have expanded to the point where each chain might itself have that many stores in a town. Milkie also points to price fluctuations among clothing brands, though he says that Buckle’s reliance on brand-name merchandise doesn’t worry him.
“This company’s been selling brands for over 35 years,” he said. “Our buyers are very, very sharp. One thing that helps us is [that] not many people out there are doing this. We can react quickly [to fashion trends].”
In the world of casual apparel chains, Buckle’s expansion strategy is a bit peculiar. For starters, the chain has opened an average of just 18 new stores annually for the past six years, a far slower pace than most expanding, mall-based clothing chains. Milkie says he expects that to climb to between 15 and 25 per year for the foreseeable future.
And though Buckle has entered such relatively large areas as Minneapolis and Dallas, “we’ve thrived in markets that are sort of one-horse towns,” Milkie said, citing Lubbock, Texas, and Fargo, N.D., as examples. Such cities draw people from surrounding areas with few shopping options. Buckle has a reputation for favoring university towns, Milkie acknowledges, but the chain considers college students merely icing on the cake.
Smaller, less competitive markets mean that Buckle “can establish a relationship with the customer,” said Davidowitz. “They do very well in the smaller places, where they can be unique, where they don’t have 200 apparel stores [to compete with].”
Finally, Buckle bases its new-store decisions on the number of potential store managers in the training pipeline rather than on the more conventional criteria of sales levels or real estate demands. “We do not want to outgrow our people,” said Milkie.
Buckle’s leasing strategy hasn’t changed much, but the company has updated its look. It recently introduced a new design for 15 stores, some new and some remodeled. The changes include revamped fixtures and a clearer separation of “departments” within the stores “to break out different brands better,” Milkie said.
With more than 300 stores, Buckle will almost certainly have to tackle larger markets to continue growing and deal with an increasingly crowded retail landscape, Peterson says. So how will the chain cope?
“Our best weapon is to be different,” Milkie said. “Not every kid wants to wear ‘Abercrombie & Fitch’ across their chest. It’s a one-stop shop for brands other kids are not wearing.”
Davidowitz says there is great promise.
“They’re a company to watch.”
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