Ross Stores Pursues National Expansion

Jun 21, 2002

Ross Stores Inc., serious about becoming a national retailer, is currently focused on expansion in the Southeast, reports Investor’s Business Daily. Last year, the discount retailer entered a new market by opening 13 stores in Georgia and the Carolinas. And earlier this month, it opened a 1.3-million-square-foot distribution center in Fort Mill, S.C.

Its expansion from California has crept into other Western states, and also jumped into Florida and Philadelphia. Ross now has 470 stores in 22 states. It expects to open about 50 stores this year, a third in the Georgia-Carolinas market.

Last year, as the economy dipped, Ross made the mistake of replacing well-known discount products with cheaper regional brands. The company’s year-over-year profit either declined or crept up in low single digits for five straight quarters in fiscal 2000 and 2001.

Realizing their mistake, it brought in more big-name merchandise such as Jones New York and DKNY selling it at discounts up to 60 percent off department-store prices. With the exception of a drop in same-store sales after September 11, the correction restored its growth.

This summer, Ross plans a redesign of its interiors, to be completed next year. Meanwhile, the company is updating its infrastructure. It plans to move its main distribution center from Newark, in Northern California, to Perris, in Southern California.

Ross also is revamping its technology to tie the whole operation together. Last month the chain chose a supply chain-management software system from Retek Inc.

Moderator Comment: Is now the right time, considering
the economy, for retailers to be pursuing national growth aspirations?

Ross Stores seems to be following a path not unlike that
of Kohl’s. It is working for Kohl’s. We’ll hold making any bets on Ross Stores
for the time being. [George
Anderson – Moderator

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