The Buckle Bucks the Recession

Discussion
May 19, 2009
Tom Ryan

By Tom Ryan

April marked the 21st consecutive
month that The Buckle generated double-digit comparable store gains. The continued
outsized performance has many wondering how exactly the mall-based denim
chain from Kearney, Nebraska is doing it.

One
reason said to be partly responsible for the teen chain’s success is location. Often
found in rural communities in Texas and the Midwest, these regions have
generally faired better than those in other parts of the country.

Another is that national
brands make up 70 percent of its mix while many competitors carry only
their own labels. Big sellers currently include Big
Star, MEK, Lucky Brand, Silver Hurley, Billabong, Affliction, Roxy and
Ed Hardy. The national assortments are complemented
by lower-priced yet higher margin private label assortments.

Writing back in December
for the Motley Fool, Kristin Graham also believes the chain has
benefited from a sophisticated inventory management systems that enables
daily delivery of new inventory to continually freshen assortments.

Other analysts have touted
its customer service levels, including a layaway program for jeans. Despite
being around for 50 years, the 390-unit chain is also seen as having not overexpanded compared
to Abercrombie & Fitch and American Eagle.

Writing last week in The
Wall Street Journal
, James Stewart noted his own problems understanding
the concept since no stores are in New York City. He decided to call
his niece, Maggie, at Franklin College outside of Indianapolis to get
some insight from her sorority members at Pi Beta Phi.

One sorority member said, "[The
salespeople] are always really attentive and friendly and they always end
up bringing you so many other cute jeans and shirts to try on … and then
you end up buying more than you planned on."

Another said, "I
shop there to buy Silver jeans. They are the only brand that fits me, and
last many years. I also like the type of clothing they have, which is different
from other places like AE [American Eagle Outfitters], Hollister, A&F
[Abercrombie & Fitch]…
I feel the clothes they sell are definitely worth the price."

Mr. Stewart concluded
that The Buckle’s appeal seems to be grounded in fit, selection and service
rather than a fashion fad, such as Crocs footwear.

"The merchandise
isn’t cheap (the company says it sells ‘medium to better priced’ apparel)
but still represents value to customers. They end up buying more than they
planned on," wrote Mr. Stewart.

He notes that while The
Buckle will face increased competition as it heads into the Northeast –
its first New York store opened in Buffalo in February – the formula is working.

I wouldn’t go so far
as to call Buckle the next Wal-Mart of retailing, but it’s clearly on a
growth trajectory," wrote Mr. Stewart.
"If it can emerge from the recession with this kind of momentum, it
could be the retail success story of the decade."

Discussion Question:
Why do you think The Buckle has been to so successful? In what ways may
it be reinventing how teen apparel retailing should be done?

Please practice The RetailWire Golden Rule when submitting your comments.

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8 Comments on "The Buckle Bucks the Recession"


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Bob Phibbs
Guest
11 years 11 months ago

The Buckle does a great job in selling the merchandise. One of my favorite ways they accomplish this is they encourage the salespeople to wear the accessories while working. This translates into more items per sale and higher tickets. Smart retailing isn’t dependent on GPS, iPhones or scanners, it is earned through selling merchandise customers want, not discounting what they happen to have purchased.

Ryan Mathews
Guest
11 years 11 months ago

Service, brands, etc. aside, a key to their success has clearly been picking their battlefields. Expansion for its own sake always makes the analysts happy (in the beginning) but it can signal the beginning of the end for a retailer. Selling where the competition isn’t is almost as good a retail strategy as selling in ways the competition doesn’t.

Dick Seesel
Guest
11 years 11 months ago

A few key points in Stewart’s Wall Street Journal article jumped out at me: 1. Merchandise mix: The store carries an assortment of “relevant” denim brands within its moderate pricing position. This plays well to a mainstream consumer outside the big cities, perhaps, that is still looking for more style and label selection than at her local mass-market chain store. 2. Expansion: To Ryan’s point, The Buckle has been cautious to walk before running and to be opportunistic. Why pursue the ego satisfaction of a mall in the New York area (with its attendant costs and competition) when you can exploit your niche more carefully? 3. Service: This may be The Buckle’s key tool in developing customer loyalty. The discussion in yesterday’s RetailWire debated whether loyal customers are simply price-driven…The Buckle surely provides a strong counter-argument.

Camille P. Schuster, PhD.
Guest
11 years 11 months ago

Provide a product that consumers believe offers value (great fit, durability, style, reasonably priced) in a convenient location with good customer service is a good basic formula. Couple that with excellent inventory management and smart location choices and there is a great model for success. The basic formula is not difficult but not a lot of retailers do all of this exceedingly well.

Brian Laney
Guest
11 years 11 months ago
The Buckle is a resounding success for two reasons: They understand that “sales” isn’t a curse word, and that the fitting room is the best opportunity you will ever have to influence a customers buying habits. If you asked anyone in my age group (25) what they know about The Buckle, the first thing most will say is “They work on commission.” What you may not notice is that these same people, who would avoid a commissioned salesperson in most other situations, don’t seem to have a problem with The Buckle’s use of commission incentives. I believe The Buckle has done a fantastic job of training their associates in the consultative sales process. Most associates will engage you with a real question: “What kinds of clothes do you like?” These questions go deeper than the obligatory “Can I help you find anything?” that you get from some less customer oriented mall spots. I say customer oriented because in order for that associate to sell you more clothes and benefit from that higher commission, they need… Read more »
Carol Spieckerman
Guest
11 years 11 months ago

I see the Buckle and Urban Outfitters having a lot in common; not the least of which is their enviable sales figures! Both promote young, come-as-you are, fun, and engaged corporate cultures; both keep assortments fresh and, if something doesn’t sell, they just move on; both encourage their sales teams to make the store environment their own. All of these elements combined help these retailers pass the hard-to-achieve authenticity test with younger shoppers and both wick off a few sales with contemporary moms who shop with their daughters. After all, Chicos, Talbots, Ann Taylor and others have left this groovy chick out in the cold!

Lee Peterson
Guest
11 years 11 months ago
The Buckle is winning due to a simple merchandising philosophy and a proven expansion technique. Like this: Re: the merchandising; they buy mostly open market goods, including footwear. Why does that work? Open market goods allow you to be trend right (or wrong) and then quickly move on, vs. the merchandising m.o.s used by major chains like the Gap or A&F, which are key-item driven and can look ubiquitous and boring in comparison. Due to this, Buckle stores look like flea markets, which makes them more fun and interesting to shop. So, you never know what you’re going to get in there, or if it will be there the next time you are. See also: Forever 21, who uses the same buying principals and is also winning big. Re: expansion; Buckle only transfers proven managers into new areas and usually opens just one store initially. That “culturally right” associate then trains the new region’s other associates in “The Buckle way.” Trust is established, culture maintained and the best thrive before the next group of stores… Read more »
Michael Tesler
Guest
Michael Tesler
11 years 11 months ago
Having the right brands every season and always updating and weeding out the weaker brands was and is a formula that works. It used to be most all successful apparel stores went that route but now it is unique. The “store as a brand” group including Gap, AE, A&F, Express, etc. are slow and often repetitive and tired looking in comparison. Zara, H&M, and the fast fashion group are strong on the coasts but not in middle America and the also do not carry assorted brands. Department stores (what is left of them) are either the too expensive (NM, Nordstrom, Saks, etc) or like Macy’s; too focused on deals and private label to get the right brands every season. It is not easy to always find the right stuff and to continually update assortments but when it is done it is easy to please young customers…as always it is about the goods–location, service, size, margins, atmosphere, and marketing are all important but too many stores forget that these things matter not if you do not… Read more »
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