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MAURICES’ FOCUS ON WOMEN’S WEAR PAYS OFF

By Rodger Brown

Maurices was having trouble with men. So it threw them over and never glanced back.

The Duluth, Minn.-based specialty chain dropped its poorly performing menswear line in favor of a plus-size line for women. This gave the little-known chain a chance to rebrand itself as a fashion-trendy destination for females between 17 and 34 in small-town and suburban markets.

The initiative is similar to one taken by Dress Barn, which bought Maurices in 2005. At Maurices, the marketing strategy is to build the business “as a whole lifestyle, not just a store,” said Dress Barn CEO David Jaffe. Today Dress Barn’s inventory is nearly 99 percent private-label, and Maurices’ is about 90 percent, all of it a fast-turning inventory of affordable, fashion-forward apparel.

“Now that we’ve exited the men’s business, it allows us to focus on the female customer,” said Vivian Behrens, chief marketing officer of Dress Barn and Maurices. “We’re in small towns, so we’re her neighborhood store. It’s a fun, spirited, 20-something attitude. We’re her best friend. So the branding is all about girlfriends and coming up with compelling promotions that will resonate with this customer.”

Behrens says Maurices has bypassed radio, TV and print advertising in favor of direct mail and special offers. The company has also pushed the Maurices credit card, which customers use in about 30 percent of total sales.

The company’s expansion has been steady. Little known outside the Midwest at the time of Dress Barn’s acquisition, the chain has grown from 464 stores in eight states in 2005 to 600 in 42 states currently. “We’re rolling out in excess of 65 new stores a year,” said Maurices CFO George Goldfarb. “In addition, we’re relocating about 25 a year to maintain our position within some of these markets. So in effect we’re doing 90 stores a year.”

Maurices, which had just come out of a restructuring when Dress Barn bought it, had its own niche and was ripe for expansion, Jaffe says. He outlines three legs for the retailer’s growth strategy.

The first deals with location. Given the chain’s relatively modest store sizes, 5,000 square feet with 50 feet of frontage, its executives have found ideal spots in Wal-Mart “shadow centers” — open-air centers measuring 20,000 square feet to 30,000 square feet and built near Super Wal-Mart units to capitalize on the traffic. “The concept is that we’ll go into these small towns where these Super Wal-Marts bring the traffic and go into these little centers right next to it where everyone will see you and where your customer will come in and shop you because Wal-Mart, for all its strengths, is not wonderful at fashion apparel,” Jaffe said.

The next leg of the strategy will echo Dress Barn’s formula of entering suburban locations that Maurices executives call “metro fringes.” These are trade areas with up to 100,000 people and average household incomes of no more than $80,000 a year. “We said, ‘If Dress Barn is going into the metro fringe areas where you get a little more competition, could Maurices go in as well?’ ” Jaffe said.

The third leg of Jaffe’s strategy involves outlets. “Maurices has done that very successfully, with about 20 outlets, and we consider that a growth vehicle as well,” Jaffe said.

Expansion outside the Midwest has already begun, with the chain opening stores in California, northern Florida and Texas, and it is eyeing other regions, too. “We see great opportunity in the Northeast and the Southeast,” Goldfarb said. It also continues to grow in its core Midwest and Northwest markets and has experienced great success with metro fringe stores outside Chicago, Kansas City, Minneapolis and the like, he says.

But for all that growth, the chain is staying clear of malls, says Jaffe. “Being off mall, there’s much less competition,” he said. What Maurices does, and Dress Barn, is go into these smaller markets, and there’s not a lot of competition. There’s also not a lot of population, so Maurices has to appeal to a very wide range of women in terms of age, size, lifestyle.”

There are outsiders who think the company’s outlook is bright. “In the short term, their likelihood of success is pretty high,” said Marshall Cohen, a retail analyst at NPD Group, a Port Washington, N.Y.-based market research firm. “They’ve been able to capture an audience that’s looking for good value. Trying to be fashion right is a risk, but they seem to have a handle on being able to deliver product pretty quickly, which makes the risk a little less. They know how to retail. The other advantage is that they are going to places that are hungry for their business rather than competing against the same hundred other apparel retailers.” Cohen also approves of the Maurices factory outlet strategy, noting that it allows the retailer to move merchandise out fast and provide the chain with additional exposure to consumers.

The long-term challenges are those that face any retailer pioneering a new model in a new niche. “It’s going to be contingent on how well they can remain fashion right and how well they can stay top-of-mind with the fickle consumer, which is a younger fashion consumer.”

The chain’s success will also rest on its continued popularity in secondary markets. “They’re not going to be the only ones that are going to try this,” said Cohen. “If they show any sign of success, they’re going to have a lot more competition. This is the fashion business. Nothing is sacred.”