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In search of bargains
By MARK ALBRIGHT
© St. Petersburg Times, Margaret Duxbury, a British retiree, can afford to spend every winter in Indian Rocks Beach. But she spends most Mondays looking for cheap clothes at Beall's Outlet. "My husband plays golf. My sport is bargain hunting." Betty Thomas sorts through the outlet racks for $5 blouses. "I could afford better, but why bother when I can find the same thing here for less?" said Thomas, a 69-year-old Tampa retiree who supplements her income by cleaning houses.
Welcome to the Monday Club, a Beall's Outlet shopping society for seniors. In Florida, the club has 1-million members, or one out of every 16 people over age 50. The result: Beall's Outlets do more business on Mondays than Saturdays, the busiest retailing day of the week. And during the winter tourist season, Monday sales are triple any other day. As other retailers struggle, the 262-store Bradenton chain posted sales gains of 20 percent in the most recent fiscal year. Even terrorism hasn't slowed sales: Most retailers reported decreased sales after the Sept. 11 attacks on New York and Washington, but sales at Beall's Outlets rose 4 percent that month. Dire predictions about the critical holiday shopping season forced department and specialty stores to slash orders. That's good news for Beall's Outlet buyers, who can find more brand name merchandise to sell at closeout prices. "The outlets have been a powerful and very profitable concept that has been a real growth vehicle for us," said Bob Beall II, chairman and chief executive of Beall's Inc., parent company of the outlet stores. * * * Beall's started as the Dollar Limit Store in 1915, but grew to a department store chain with 72 stores and 30 My Gift Cottage shops under the third generation of family ownership. The chain added outlets in 1987 as a way to unload unsold goods. The off-price niche is dominated by Ross Stores Inc. and TJX Cos., which owns Marshalls and TJMaxx. Ross, TJMaxx and Marshalls have combined annual sales of $12-billion, compared with $254-million at Beall's Outlets. The bigger chains cater to customers shopping the upper end of moderate-price brands. Beall's Outlets found a niche by catering to a more price-conscious customer.
"We underprice Wal-Mart on familiar brand names," said Paul Galizia, president of Beall's Outlets, noting that the average garment sold at Beall's Outlets goes for $5.86 and the average shopper spends just $22 per trip. To stock the stores, department stores and mall retailers pick their goods before the season. And their buyers are wined and dined. Buyers for the off-price chains, meanwhile, go to work after the season ends. And they work the phones and hit the road looking for deals. At Beall's, 30 buyers scour manufacturers' showrooms, dingy warehouses and crowded apparel factories for bargains. About 10 percent of what they dig up are irregulars, clothes with minor flaws. About 60 percent is leftovers from retailers or discontinued styles. "Our job is getting suppliers to call us instead of somebody like Maxx or Ross," said Tianne Doyle, a ladies sportswear divisional vice president. "In this business, you're only as good as your last deal." Sometimes that means driving down desolate alleys to find unmarked warehouses in Los Angeles and Manhattan. Inside, they look over 100,000 garments hanging from pipe racks.
This fall, off-price buyers are having a field day. That's because most department stores have been canceling orders because consumers have turned frugal. It means a broader selection. For instance, Brooks Brothers slacks and Jones New York suits have been spotted at Syms and Burlington Coat Factory. Beall's Outlets buyers found 8,000 twin sweater sets that had been headed for JCPenney, 160,000 pieces of costume jewelry made for the Limited Express and 24,000 moleskin jackets headed for Burdines, among others. "Usually these vendors won't even see us until after Christmas," said Melissa Wadsworth, a junior sportswear buyer. "Now they're calling us, saying, 'Hey, we've got something for you right now.' " One of Beall's Outlets' strengths is keeping costs low. Stores are built in inexpensive shopping center spaces. Furnishings are bare bones. The average Beall's Outlet in Florida costs $300,000 to open, including inventory. But it generates $1-million a year in sales. The company plans to open 50 more outlet stores, mostly in Florida, by Christmas and 30 more in the rest of the fiscal year. In the chain's 14-year history, only 10 Beall's Outlets have closed. The segment is expected to grow as discount stores eat away at mall sales. Struggling JCPenney, for instance, has been dropping its pricier lines. Sears is transforming stores to be more like discount rivals. "With a recession and rising unemployment, you're going to see more people trading down to discount and off-price chains," said Joan Bogucki-Storms, an analyst with Wedbush Morgan Securities in Los Angeles. * * * Shopping the outlets requires patience. Customers have to look through all sorts of obscure brands to find the good stuff at the lowest prices. The stores are also crowded with a variety of impulse buys, such as $5.88 disposable cameras and a $10 leopard print lamp shade. "Clutter is good," said Beall's Outlets president Galizia, a former executive for Marshalls. "Our stores are a treasure hunt." As a result, diehard Beall's Outlet veterans linger for an hour looking for deals. For instance, stores have the never-ending clearance sale called "follow the dots." Colored dots stuck on the price tags tell how long an item has gone unsold. After two months, an item's price automatically drops by 20 percent. After three months the discount is 40 percent; the price hits bottom at 95 percent off in the seventh month. On Mondays, the stores are jammed with seniors because that's when Monday Club members get an extra 15 percent discount. "We've actually had club members ask if we pay them to take something that's 95 percent off," St. Petersburg store manager Julie Stambaugh said. (The answer is no.) Some regulars shop the store a day in advance just to lay out their battle plans for Monday. "We find clumps of clothes hidden all over the place," Stambaugh said. The triple-witching hour comes any Monday that coincides with the dots changing and the arrival of Social Security checks. "That's when we're really slammed," store manager Debbie Combs said. One problem for the outlets: They appeal mainly to seniors, not younger shoppers. So Beall's is testing in the Tampa Bay area another chain called Burke's Outlets. The formula is the same, but the clothing is mostly for children and teens. The target: open 200 Burke's in Florida. "We needed another name because kids would never shop at a Beall's Outlet," Galizia said. "To them, it's a place where their mothers and mothers-in-law shop." - Mark Albright can be reached at albright@sptimes.com or (727) 893-8252. The four sides of Beall's Inc.Founded in 1915 as the Dollar Limit store, the Bradenton retailer has grown into four retail chains. Chairman and chief executive Bob Beall II is the third generation to run the closely held company. In the fiscal year ended Aug. 4, revenues increased 16 percent to $599-million, up from $517-million. The chains: Beall's Department Stores: 72 moderate-price department stores in Florida and Georgia. Beall's Outlet: 262 off-price apparel and gift stores that deal mostly in closeout merchandise. Includes 180 stores in Florida and 83 scattered across nine Sunbelt states. Priced to compete with Wal-Mart, Family Dollar and Dollar General. Burke's Outlets: The name for Beall's Outlet's outside Florida, Georgia and Alabama. Offers a bigger selection of apparel for young people. Now appearing in Florida as a test to attract young customers. Company expects to build 200 more in Florida. My Gift Cottage: A chain of 30 gift shops previously known as Out n' Out Gifts. SOURCE: Beall's Inc.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
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From the Times Business report
From the AP
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