Shopping Centers Today International

FEB 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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says, on an in-house product development and design division and on new sourcing offices in Asia to help improve quality and fit while also maintaining everyday low prices. "The design function was started in 2014 in conjunction with the opening of our Asian sourcing offices, and we are integrating these functions, processes and people into our busi- ness," Cato said. "Our design organization will identify trends and create designs that are exclu- sive to Cato, with the help and collaboration of our buying organization, fabric specialists, art staff and sourcing teams in Charlotte and Asia. As we layer on unique, exciting designs to our as- sortments, we will continue to bring existing cus- tomers back to Cato while attracting new ones." And though the retailer already refreshes its product assortment on a weekly basis, these divi- sions have been charged with improving timeli- ness, Cato says. "Our Asian sourcing offices are located closer to the manufacturing centers, and we expect faster development and delivery of new products," he said. Fast-fashion chains tend to churn out run- way-inspired looks in a New York minute, and this has had a ripple effect on other clothing retailers, as shoppers increasingly expect stores to showcase new merchandise more frequently. "National retail chains are attempting to grow store count with little new development to meet this demand," Cato said. "To us, this is a simple supply-and-demand problem. Plus, not only is there a lack of new store opportunities, the in- creased competition has driven up store rents and caused unfavorable deal terms that do not fit the current Cato store development model." The retailer scaled back its store opening plans in 2015 from 40 units to about 30, owing to these constraints, he says. The company prefers anchors at its retail locations like Target, Walmart, department stores and upscale grocers. The Cato division targets 4,000-square-foot stores, while the Ver- sona chain seeks out 6,000-square-foot spaces in power cen- ters, anchored lifestyle centers and enclosed malls. The It's Fashion division seeks 4,000-square-foot spaces in shopping centers anchored by Walmart or Target and which draw the junior-fashion customer, the CEO says. "Multiple anchor cen- ters that include a national grocer and/or a mix of national soft-goods and junior-apparel use will also be considered." Though the retail real estate environment may be ham- pering the company's store-expansion desires a bit, it re- mains highly optimistic. Management will hunker down, meanwhile, and stick to its current strategy until things im- prove. "We feel that our new product-design and sourcing initiatives will drive comparable-store growth," Cato said. "We continue to look to grow e-commerce to drive both Web and store volume." SCT r e T a i l i n g T o d a y F e b r u a r y 2 0 1 6 / S C T 17

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