Big Lots 2011 Annual Report Download - page 6

We made a number of other significant changes, often
challenging paradigms that have been ingrained in our
culture. For example – toys, a holiday season staple,
were allocated less floor space and inventory this year.
We correctly anticipated a shift in consumer buying
trends toward electronics, the toys of a new age. These
toys have screens and memory cards. They’re electronic
gadgets that fascinate a tech-savvy generation and
have a broad appeal with consumers of all ages. This
merchandise shift created a buzz in our stores and
enhanced our treasure hunt atmosphere.
After a lackluster first half, sales trends accelerated in the
third and fourth quarters. In fact, with the exception of the
planned decline in toys, all major categories generated
comparable sales increases in the second half of the year.
During my visits to our stores, I see a merchandise
assortment that continues to get stronger and more
focused on value and brands. Special initiatives, like
our Friends & Family 20% off discount event, have been
successful in introducing new consumers to Big Lots. And
strategic shifts in merchandise, like our move to the new
toy business, should have a lasting appeal with shoppers.
New Store Growth in the U.S.: We also increased our
store footprint in the United States. After opening 80 new
stores in 2010, we opened 92 new stores in 2011,
including 25 in “A” locations — that is, close to top-line
malls or “power strips” featuring a market’s best retailers
and demographics. We also continued to close and
relocate stores to better, higher traffic locations, ending
2011 with 1,451 stores — a 4% increase in square footage.
Overall, we have been quite encouraged by the progress
and results from new stores. We have experienced success
in high-population, high-rent areas as well as suburban
and rural areas. In fact, many of our highest volume
stores this holiday season were new stores opened in
2011. I continue to believe new stores are the best
investment we can make for the future of this company.
Our store expansion has also created jobs… jobs in
the stores, in our field organization, in our distribution
centers, and in our home office. These are good jobs
with competitive wages and benefits — jobs that
offer the opportunity for future advancement within
the company. At a time when many retailers are
eliminating jobs, pulling back, or shutting their doors
altogether, we continue to grow, open new stores, and
create meaningful employment opportunities. We have
operations in all of the 48 contiguous states and capital
available to support future growth.
Expansion into Canada: In July 2011, we also added
Liquidation World, a Canadian company, to the Big Lots
family. This acquisition enables us to extend our footprint
into Canada for the first time in our company’s history.
In many ways, this expansion reminds me of “the early
days” at Big Lots. We see an underserved customer
who is looking for Extreme Value. We recognize the
need for a multiyear plan to transform Liquidation World,
with an intense focus on hiring the right people, building
inventory, and cleaning up the stores. A Canadian
version of our WIN strategy… feels like déjà vu all
over again.
The early response has been exciting. Like many
American shoppers, the Canadian consumer enjoys our
high-quality merchandise at bargain prices. At times, the
sell-through has exceeded our expectations. This gives
us even more confidence in the longer-term potential of
this acquisition. We believe it positions us for long-term
growth and future shareholder value creation.
After years of doing
what we said we were
going to do, we're
ideally positioned for
the future.