Stein Mart Will Add to Stores in Southland
Off-price retailer Stein Mart Inc. has begun opening the first of what analysts say could be as many as a dozen additional stores in Southern California, a move that could intensify what is already stiff competition in the retailing market.
The Jacksonville, Fla.-based chain, which operates 170 stores mainly in the South and Southeast, opened its first Southland store in Poway earlier this year. Later this month, it will open a store on Marguerite Parkway in Mission Viejo, and brokers say it is finalizing plans for stores in Fullerton, Irvine and Palos Verdes next year. It also operates a store in San Jose.
Company officials declined to comment on the number or location of stores they plan to open in Southern California.
Stein Mart is entering a fiercely competitive retail market, already inhabited by discounters such as T.J. Maxx and Ross Dress for Less. But analysts say its concept of selling discounted current-season apparel and gifts in a plush setting may be distinctive enough to catch on.
“I like their merchandising philosophy,” said retail analyst Elizabeth Pierce of Cruttenden Roth Inc. in Irvine. “They buy like a department store but price it like an off-pricer.”
The stores even include a boutique of very expensive clothes that is staffed in one-day shifts by “ladies who lunch” from the surrounding community. Word-of-mouth has helped boost sales in smaller communities, but analysts are unsure how it will work in the Southland’s more urban climate.
Unlike its department store competitors such as Robinsons-May and Macy’s, Stein Mart’s 38,000-square-foot stores are separate from regional malls, usually tucked into centers anchored by grocery and drugstores in upper-income suburban neighborhoods.
These smaller locations have made it much easier for the company to expand, as grocery chains consolidate and move to larger locations, said Jim Clarkson, a partner in Newport Beach-based Strategic Retail Advisors.
The retailer, which was started at the turn of the century by Chairman Jay Stein’s grandfather, has been on an expansion kick. In 1997, it opened 28 stores and expects to open 32 more by November, bringing the total to 183 stores in about 30 states, spokeswoman Susan Datz Edelman said.
But this leap in market share has taken a toll on the chain’s bottom line, one already bruised by a season of slower-than-expected sales.
Although same-store sales--sales at stores open at least a year--are up, the company, which posted revenue of $792.7 million in 1997, said recently that it expects to post a modest loss in the third quarter. Its stock dropped almost 19% to $6.63 in one day in reaction to the news, but it has since rebounded, closing Thursday at $8.03 on Nasdaq.
