Christmas Tree Shops storefront
Photo: Sarasota Herald-Tribune

Does Christmas Tree Shops Need Saving?

Christmas Tree Shops entered bankruptcy in early May with a plan to close 10 of its 83 stores, reduce debt and exit within months, but the filing raised concerns about the New England home decor retailer’s survival.

“This is strictly a financial restructuring,” Christmas Tree Shops’ chairman Marc Salkovitz said in a statement. “Our operations are sound. By increasing our financial flexibility, we will be able to focus on continuing to delight our loyal customers with a wide selection of unique goods at affordable prices.”

Slowing consumer demand caused by inflationary pressures and increased interest rates were blamed for weaker sales. Bed, Bath & Beyond, its former parent, and Tuesday Morning also recently landed in bankruptcy court as the home category has slowed down following a pandemic surge.

Christmas Tree Shops began as a small Christmas knick-knack shop in Cape Cod in the 1950s and expanded to a massive discounter of home goods and multi-seasonal items with the jingle: “Don’t you just love a bargain?”

Bed Bath & Beyond, after acquiring the chain in 2003, expanded Christmas Tree Shops from 23 to more than 80 locations before the 2020 sale to the husband and wife duo of Pam and Marc Salkovitz.

The stores, known for their architecture with many resembling Colonial, Victorian or even Old English barn style, are mainly shopped for their treasure-hunt bargains.

“We could always count on finding wonderful treasures there over the years, including wool area rugs with New England motifs, lamps, blue and white Chinese export decor, stationary, great window treatments, and on and on,” one fan told Boston.com.

Another said, “I could go on about spending hours in a store to pick up only a few items and come out with many bags for great finds.”

The Salkovitzs last year rebranded Christmas Tree Shops to CTS since many non-New Englanders thought it only sold Christmas trees. Investments from the new owners have also been made in inventory management, IT and a customer loyalty program.

“We continue to believe that given its storied history and strong customer loyalty, Christmas Tree Shops has tremendous potential,” Mr. Salkovitz said.

BrainTrust

"Antiquated or just perilous, category-killing is a risky business (see Bed Bath & Beyond, David’s Bridal, Party City…)."

Carol Spieckerman

President, Spieckerman Retail


"Some believe the “invisible hand of the market”... remove[s] underperforming businesses. But flawed vision/leadership are more generally to blame."

Dion Kenney

COO, Mondofora


"Some retailers just wear out. They may be novel for a short time in their season, but longevity in the market today is tough and rough."

Rich Kizer

Principal, KIZER & BENDER Speaking


Discussion Questions

DISCUSSION QUESTIONS: Is the Christmas Tree Shops (CTS) model antiquated or aligned well with trends toward the treasure-hunt experience? What advice would you have for the owners?

Poll

18 Comments
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Mark Ryski
Noble Member
10 months ago

The CTS is a throw-back to the local shop, and while New Englanders might be attracted for sentimental reasons, this chain will likely continue to be challenged. Restoring the financial stability is a critical first step. Management needs to also look at what their true value proposition is and focus. And notwithstanding it’s history, the branding is also challenge – Christmas is not an occasion that all consumers celebrate the same way, and the name implies that what it has to offer is only for Christmas related goods.

Gene Detroyer
Noble Member
10 months ago

Strictly a “financial restructuring? Yes, the equity holders are wiped out, the debt holders get equity, and the new money controls the company. Don’t you love the way CEOs spin their problems?

It isn’t necessary for anyone to advise the new owners. They will copy the blueprint they likely have followed many times. Invest little or none, make lots of money on fees, and when the goose is feathered, eat the goose.

Carol Spieckerman
Active Member
10 months ago

Antiquated or just perilous, category-killing is a risky business (see Bed Bath & Beyond, David’s Bridal, Party City…). Amazon, Walmart, Home Goods, and even dollar stores are surrounding and crushing narrow-focus retailers right and left. Brick & mortar retailers and online marketplaces are opportunistically grabbing onto high-margin categories. Diversify or die is retail’s new mandate.

Dion Kenney
10 months ago

Some believe that the “invisible hand of the market” provides a “survival of the fittest” cleanse to remove underperforming businesses. But flawed vision or leadership are more generally to blame. By comparison, dollar stores are proliferating in the current business climate. Christmas Tree Stores offerings are still in demand, but their marketing message and esthetics are not aligned with the current buying dynamics.

Mark Self
Noble Member
10 months ago

My advice is to sell. Sell while you can.

Neil Saunders
Famed Member
10 months ago

While some Christmas Tree Shops stores are great, many are abysmal and have been for quite some time. Alongside this, the proposition is a messy jumble of things sold at price points that are not particularly competitive. It is basically a bad version of Bed Bath & Beyond – which is hardly surprising as, up until recently, they were part of the same group. As sad as it is for staff losing their jobs, I don’t see anything worth saving.

Rich Kizer
Member
10 months ago

Some retailers just wear out. They may be novel for a short time in their season, but longevity in the market today is tough and rough. Complicated with money problems, and lack of consistent traffic not so good for finding funds to continue. Sometimes we just have to see the clouds.

Ken Morris
Trusted Member
10 months ago

Bankruptcy is a normal retail operation once they get acquired. The new owners want to retire old debt and close underperforming locations. You will always keep your “A” stores open not “D” store will close. The treasure hunt is alive and well at TJX, Ross and other off price players. The name change to CTS didn’t help the cause. I would return to the full name and ditch the CTS altogether. Put the Christmas theme back in the store, otherwise it’s just a big space where you can get the same things elsewhere, online.

Speaking of big spaces, maybe they should make it a complete Christmas market experience, roasting chestnuts and all. Or at least add a themed food court to keep customers engaged.

Rich Kizer
Member
10 months ago

By the way, for us old retailers out here, there is a formula we all lived with and one that still works: GMROI. “Gross margin return On Investment’. Simply put, if it isn’t ONE AND A HALF OR MORE, THAT S SERIOUS TROUBLE.

E BETTER … THERE IS TROUBLE.

DeAnn Campbell
Active Member
10 months ago

The entire treasure hunt discount model is under stress, as evidenced by the collapse of Tuesday Morning and downsizing of Family Dollar, Big Lots, Dollar Tree, Dirt Cheap, Marshalls and more. While it can be fun to browse for treasures in a physical store, shoppers are economizing on, not just money, but time. It’s far more convenient to search on platforms like Amazon, Temu and Walmart.com to find a far greater range of options at the same price or less. Companies like Dollar General remain stable for now, especially given their often underserved community locations, but the need for close-out and deep discounter physical stores is waning.

Evan Snively
Member
10 months ago

They have a decent social following and I would imagine email list from their Insider group. I would definitely consider adding in e-comm functionality. If they want to keep the essence of their “bargains” they could have a “deal of the day” that is only accessible to Insiders or those following on social. Limited QTY of a single item. Would drive visibility & engagement to assist with a larger bounce back strategy.

Kai Clarke
Kai Clarke
Active Member
10 months ago

CTS is an old template retailer who is trying to exist in a flexible, dynamic, environment that is lead by cutting edge technologies, changing value propositions and a multiverse of products. They need to adapt or perish, since their old format and retail premise is clearly not working.

Jeff Hall
Jeff Hall
Member
10 months ago

While I love the historical back story of a local, mom and pop retailer finding a niche, nurturing a loyal customer base and scaling it over the years, this just feels like the brand has run its course in its current iteration. The unprecedented pace of change in retail has winners and losers. Unfortunately, CTS, in trying to be a bit of everything to everyone, is now lost in a sea of alternative shopping experiences.

Craig Sundstrom
Craig Sundstrom
Noble Member
10 months ago

My initial thought was “Xmas shop…isn’t that the ultimate niche company?”, but upon reading the description, I see that the name isn’t particularly descriptive. Actually it sounded like a holiday themed BBB, so – lo and behold! – what a surprise to see that was exactly who ramped up the store count While, as always, I’ll wish them well, my internal BS detector automatically translated “wonderful bargains” into “low priced junk”; I’d love to be wrong but I suspect too many others have the same language settings.

Rachelle King
Rachelle King
Active Member
10 months ago

It’s required of company leadership to speak with confidence and vision for their company; whether it’s a reality or not.

Rachelle King
Rachelle King
Active Member
10 months ago

It’s required of company leadership to speak with confidence and vision for their company, whether it’s a reality or not.

Anil Patel
Member
10 months ago

In my opinion, the Christmas Tree Shops (CTS) business model is definitely antiquated and needs major upgrades. They need to improve their brand image as many customers still perceive them as a “seasonal shop” that exclusively sells Christmas trees.

Additionally, CTS may have to realign its customer acquisition strategy from scratch. Often under revenue pressures, companies move away from their target audience and miss the mark. The owners must clearly define their “Ideal Customer Profile”, which caters to specific customers rather than attempting to sell to anyone and everyone out there.

Ashish Chaturvedi
Member
10 months ago

Businesses with seasonal demand often are the first victims of difficult times. It’s time for Christmas tree shops to morph into a more diversified business model. We need to preserve the rich historical significance of these businesses; however, in such cases, market forces and changing customer preferences define the fate of the business. Attention Christmas Tree Shops – it’s time for a revamp.