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DOTS ROLLS OUT REDESIGN FOR ITS FRUGAL ‘DIVAS’

By Neil Janowitz

There will surely be no identity crises over at Dots. Executives of the Solon, Ohio-based seller of affordable women’s apparel say they know exactly what they do and for whom they do it.

“We’re a fast-fashion retailer,” said Rick Bunka, who rose from CFO to president of the company in May. “We offer full lifestyle apparel for women 18 to 45 and reach a broad, economically diverse customer base.” Because it targets households with income around the national average ($45,000-$65,000 a year) and scouts trade areas with between 55,000 and 75,000 residents, the company essentially serves Middle America, Bunka says.

That was what founder and CEO Robert Glick had in mind 20 years ago, when he set out to open a store that would adhere to the motto, “$10 or less every day.” With a strong line of house-branded merchandise, the chain quickly grew to reach much of the Midwest. By the mid-1990s Dots had 200 stores, and though it dropped the sub-$10 tag line, its purpose remained the same: to be the primary destination for practical, cost-conscious women. As the Dots promotional materials declare prominently, the company regards its customers as “divas,” albeit divas with an eye on both the fashions and the household budget.

But even the best-conceived concepts become dated. After two decades, 24 states and 400 stores, the chain was in need of revitalization, Bunka says. “About two years ago we conducted some extensive research to determine what makes us tick,” said Bunka. “We wanted to find out what elements helped define us, and what kind of opportunity we had to become more important over time. The analysts came back and proposed changing our stores in a number of different ways. They said we should make it a more fun and easy shopping experience, more spacious and more updated and sexy.”

So Bunka set out to remake the concept accordingly. Going forward, all the stores will bear the new design, which boasts vibrant colors, additional mirrors and dressing rooms, and sexier mannequins. Even the logo, previously a staid serif font with a clothes button for an “O,” has been reconceived in cursive fashion. The result is a store with a trendy, feminine feel, Bunka says. Close to 1,000 people turned out for the grand opening of the Dots store in Cleveland’s Steelyard Commons, which was both Dots’ 400th store and its first with the new design, said Mitchell Schneider, CEO of First Interstate, the Lyndhurst, Ohio-based real estate company that developed, owns and manages Steelyard Commons.

“Considering their price points, Dots did a remarkable job in coming up with a first-class presentation,” Schneider said. “The logo looks great, the color selection is attractive, and they have a very appealing layout. You feel like you’re shopping in a more expensive store.”

Schneider says he has long been a fan of Dots. “They’re a local company, so we’ve been familiar with Dots for years,” Schneider said. “We knew they had quality merchandise at good price points, which is the perfect complement to our soft-goods shops.”

That the build-out and opening processes went so smoothly only served to bolster Schneider’s opinion of the company. “They did everything they said they would and had the right people in place. We have a great working relationship. I’d always welcome an inquiry from them.”

Anticipating that other management companies will find Dots as appealing as Schneider, the company has drawn up some ambitious expansion plans. Bunka says Dots will roll out four additional stores featuring the new design by year-end, and 40 more will be added next year. If all goes according to plan, the chain will have nearly 150 in total over the next three years. The majority of those will be in the Midwest and the Northeast. Dots also has plans to expand aggressively in the South and is making a state-by-state push Westward, with Oklahoma and Colorado being next in line.

Bunka says he is predominantly targeting lifestyle and power centers, preferably in grocery-anchored open-air centers. Home Depot, Marshalls and Wal-Mart make ideal neighbors, he says. Dots stores typically measure between 4,000 and 6,000 square feet, with 40 feet of frontage.

Of course, the question remains how a company whose target audience is Middle America will fare as it reaches the more brand-conscious coasts. But Robert K. Passikoff, president of Brand Keys, a New York City-based retail consulting firm, says Dots will succeed if it keeps to its tradition of personal service.

“They’ve never been the type of place that has a ‘Here’s our stuff, come get it’ attitude,” Passikoff said. “And given the current marketplace, anyone who can deliver higher levels of perceived customer service is going to do well.” Passikoff says “perceived” customer service is just as important as the actual service. “They’ve cultivated an impression of being the neighborhood guys — the store that understands the consumer and the consumer’s needs,” he said. “They make shoppers feel as though they’re being served on a one-at-a-time basis. It adds a sense of implied value to the experience.”

Continued success will depend upon the chain’s ability to maintain its local touch. “Paying attention to the customer has always been a strength of Dots,” he said, “so I’m confident they’ll be able to continually adjust. In the end, that’s all that counts.”