The Buckle Bucks the Recession
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?
- A Retailer Bucks a Trend With Sales
Success in Its Jeans – The Wall Street Journal - A Retail Play for 2009 – Motley
Fool
Take Our Instant Poll
Loading ...
Join the Discussion!
8 Comments on "The Buckle Bucks the Recession"
You must be logged in to post a comment.
You must be logged in to post a comment.
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.
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.
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.
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.
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!