Harmon Discount Health & Beauty, the New Jersey-based division of Bed, Bath & Beyond, recently opened its 39th store in a new highway strip center in Clifton, N.J. under the banner Harmon Face Values. In signage in front of the store and on shopping bags the word Harmon appears above Face Values, but in much smaller letters.
A new logo emphasizes the V in Values by using a different typeface and is shaded red while all other letters are white.
BB&B company officials have remained mum on the topic. Even in a conference call Wednesday reporting its year-end numbers, no mention was made of the change. The company also did not respond to phone calls for comment. But a store associate in the Clifton unit remarked that the plan is to rename all the Harmon stores.
Debt-free and with sales climbing - from $5.8 billion in 2005 to $6.6 billion in 2006 - Bed, Bath & Beyond is in expansion mode. It plans to add another 70 units to its flagship BB&B division, now totaling 816. It also just acquired Bye Bye Baby.
Since absorbing Harmon in 2002, it has built the chain from 29 to 39 stores and introduced Harmon shop-in-shop departments in several Bed, Bath & Beyond stores. In the conference call, company officials said they were expanding that initiative, but did not say how many Harmon shops currently exist or would be added.
Harmon has built a reputation with consumers on wide variety and low price. The newest unit, at about 3,200 sq. ft., is smaller than the typical Harmon store that ranges from 5,000 sq. ft. to 9,000 sq. ft. The company apparently is interested in testing various footprints.
The Clifton store, while using the basic merchandising techniques of the chain including a gauntlet of blue plastic baskets filled with travel-sized and bargain products lining the entrance, brings a finer touch to the front-end with wooden flooring. The rest of the store is covered with indoor/outdoor-type carpeting.
In a random review of prices at a Walgreens, a CVS and a Harmon in West Caldwell, N.J., Harmon's prices did come out lower. A Revlon Super Lustrous lipstick was $5.59 at Harmon, compared to $7.99 at Walgreens and $7.49 at CVS; Crest Renewal Whitestrips were $34.99 at Harmon and $39.99 at both Walgreens and CVS; and the L'Oreal Refinish Exfoliating Facial Kit was $10.99 at Harmon, $14.99 at Walgreens and $12.99 at CVS.
Harmon also continues to push its private label program. On-shelf signage throughout the stores takes direct aim at its branded competitors. For instance, it compares a 16-oz. Harmon skin lotion at $3.99 to the Lubriderm item priced $7.59. A 16-oz. Harmon brand Tea Tree shampoo for $5.99 compares to a much smaller 8-oz. Paul Mitchell Tea Tree shampoo for $8.99.
Discussion Questions: Will developing Harmon stores-within-the-store at Bed Bath & Beyond make it easier for the chain to open standalone locations in new markets outside the New York metro area? As a store-within-the-store concept, is Harmon a match for the Bed Bath & Beyond profile? Is Harmon's pricing strategy a viable means for it to compete against the likes of Walgreens, CVS and Rite Aid as well as competitors in grocery, mass and clubs?