Fundas on Specialty Retail

1. THE DEFINITIVE RANKING 2OO5
StORES
A S P E C I A L R E P O R T S P O N S O R E D B Y A L L I A N C E D ATA S Y S T E M S
®

2. SPECIALTY
THE NATION’S BIGGEST
CHAINS
S
BY DAVID P. SCHULZ
hakeouts and consolidations in other
retailer segments — department, drug
and grocery stores, in particular — are
expanding the possibilities for specialty stores
as both suppliers and consumers seek new
outlets for merchandise.
Specialty retailers, once dismissed as “satellites” meant to fill up mall space
between department store anchors, are now a major force in retailing, whether
in the context of shopping centers or as freestanding entities.One factor boost-
ing specialty retail is the growth of so-called lifestyle shopping centers. Though
the configurations differ, these centers generally are mixed-use facilities in-
corporating some combination of residential and recreational/entertainment
usage with retail stores. The tenor, or lifestyle aspect, is created by the retail
tenants, which typically do not include a department store or large general
merchandise retailer.
Specialty store operators are themselves playing the “lifestyle” card. Big
box retailers, such as Best Buy and
1 Bed Bath & Beyond, are using
smaller, more intimate locations
with narrowly focused offerings
to penetrate niche markets.
Best Buy, which once again
tops the STORES Top 100 Spe-
cialty Retailers chart, is using
both concept stores and service
outlets to address consumers’
lifestyles, while Bed Bath & Be-
yond is using recent acquisi-
tions to edge beyond its home-
store envelope toward other
aspects of shoppers’ lifestyles.
Best Buy is testing neigh-
S2 STORES / AUGUST 2005 WWW.STORES.ORG

3. 13
7
A lliance Data Systems is proud once again to sponsor the
STORES magazine special report on the nation’s Top 100
Specialty Retailers. These companies represent the biggest
and best in specialty retail. It’s a pleasure for us to be able to
work in this diverse and dynamic industry, and to provide
integrated credit and database marketing services to more
than a few members of this year’s list.
Information is power. That’s why informative resources like
the STORES report are so valuable. It’s a thorough resource
on the prime movers in the industry, with plenty of insight
and analysis from the STORES editorial staff. It’s information
you’ll use again and again.
And while all information is valuable, the right information
can be invaluable. It can make you
smarter, more aware and better pre-
pared. Whether you’re selling toys
or tires, knowing the customer and
delivering a product, service or
experience that is responsive to his
or her needs and expectations is
the only way to compete in a mar-
ketplace with more choice than
ever before.
At Alliance, our programs are centered on delivering the
“right” information to retailers. We gather and analyze critical
data and use that information to help our clients drive sales.
We deliver the customer insights and customized solutions
that create a deeper relationship between a retailer’s cus-
tomer and their brand, and turn casual shoppers into dedicat-
ed customers. It’s all about learning and adapting to a moving
marketplace — a skill these Top 100 companies likely learned
long before they earned a coveted spot on this enviable list.
So congratulations to this year’s Top 100. And when you’re
looking for definitive information about America’s premier
specialty stores and sales, refer to this report. When you’re
looking to know more and sell more, call Alliance Data Sys-
tems.
Sincerely,
Ivan Szeftel
President of Retail Services
Alliance Data Systems
WWW.STORES.ORG STORES AUGUST 2005 S3

4. TOP 1OO
SPECIALTY RETAILERS
4
borhood, or “communi- Always trying to stay
ty-centric,” concepts Stu- connected to their
dio D and Escape to customers, both
reach consumers who are Office Depot and Gap
intimidated or otherwise have unveiled new
uncomfortable shopping store designs in the
in one of its 500-plus last 12 months.
warehouse-sized stores.
Studio D, in Naperville, Ill., has the feel of
a fashion boutique and is clearly appealing to
women who make consumer electronics
buying decisions. The store has an area for
consultation and instruction, which may re-
sult in recommendations
for purchasing items at a WHAT’STHEM?
ABOUT
SO SPECIAL
Among the activities that Can’t figure out why
large Best Buy store.
some companies are
represented in the
take place at Studio D
Top 100 Specialty
are instruction in creat-
ing digital scrapbooks Retailers chart and
from photographs and others aren’t? See an
other sources, as well as explanation of the
training in such things as method behind our
printing over-sized pic- madness on page S15. 2
tures.
S4 STORES / AUGUST 2005 WWW.STORES.ORG

5. TOP 1OO SPECIALTY RETAILERS
To the extent that it is available, STORES gathers performance data from the annual reports of publicly traded retail companies. The Top 100 companies for which STORES
has made sales estimates are, in descending order: CompUSA, IKEA, Bass Pro Shops, Hobby Lobby, P.C. Richard, Eddie Bauer, Crate & Barrel, Academy Sports, KB
Toys, Fry’s Electronics, Modell’s, J&R Music World and Computer World, BrandsMart USA, Forever 21.
Company Headquarters 2004 Revenues Y/Y 2004 Earnings Y/Y No. of Y/Y
Rank
Comment (000) Change (000) Change Stores Change
1 Best Buy Minneapolis $27,433,000 11.8% $984,000 39.6% 830
In reversal of usual claims, Best Buy says recommendations from store associates drives online sales; testing in-store restaurant in Chicago’s
8.2%
Lincoln Park neighborhood
2 Gap San Francisco 16,267,000 2.6 1,150,000 11.6 2,994 -0.9
Moving to strengthen balance sheet and focus on capital structure with moves such as retiring debt ahead of schedule and spending $2.5 billion to
repurchase shares
3 Staples Framingham, Mass. 14,448,378 11.4 708,388 44.5 1,680 7.8
Ten stores open in Chicago, home market for its Quill mail order division; 24 stores expected by end of next year and perhaps double that number by
the end of 2007
4 Office Depot Delray Beach, Fla. 13,564,699 9.8 338,159 22.4 1,190 8.3
As part of drive to open 100 new stores by the end of next year, 1,000th North American unit bowed in June in Countryside, Ill.; domestic division
generates 44% of volume
5 OfficeMax Itasca, Ill. 13,270,196 60.9 173,058 913.5
Sam Duncan, late of ShopKo, takes chair/CEO/president reins of company SEC is investigating over accounting issues involving
935 -4.1
vendor allowances
6 Toys “R” Us Wayne, N.J. 11,100,000 -4.0 252,000 186.4 1,499 -0.1
Shareholders OK buyout by private firms; chairman/CEO John Eyler, COO Christopher Kay promptly announce resignations, taking with them $65
million and $14 million, respectively
7 Circuit City Richmond, Va. 10,472,364 6.2 61,658 -169.1 612 2.2
Some executive shuffling after Q1 results were released showing net loss widening to $13 million from $6 million a year ago; SGA expenses rose on
inventory write-downs
8 Limited Columbus, Ohio 9,408,312 5.3 637,272 9.2 3,779 -3.4
Apparel moves to support role as founder Leslie Wexner says, “We’ve reinvented ourselves completely. We are now predominantly a personal care,
beauty and lingerie company.”
9 Blockbuster Dallas 6,053,200 2.4 (1,256,100) 43.5 9,000 0.0
Even with financier Carl Icahn on board as a director, rumors continue to fly about a possible takeover bid, with private equity firms prominently men-
tioned as candidates
10 AutoZone Memphis, Tenn. 5,637,025 3.3 539,893 5.3 3,483 8.2
Overall sales sagged and same-store sales dropped 5% in Q3 ended in May; margins improved 91 basis points and income rose 3.2%; opened net
of 31 stores in the period
11 Foot Locker New York 5,355,000 12.1 293,000 41.5 3,967 9.9
Operates stores in 17 countries under various Foot Locker names as well as Champs Sports; acquired 11 locations in Ireland last fall to give it nearly
500 units in Europe
12 Bed Bath & Beyond Union, N.J. 5,147,678 15.0 504,964 26.4 663 14.1
With 20% average annual earnings growth, company is Wall Street favorite, particularly among hedge fund managers; rolling Christmas Tree shops
beyond Northeast
13 Barnes & Noble New York 4,873,595 11.5 143,376 -5.5 820 -2.6
As big as it is, a new Harry Potter book due out in July raises hopes for Q2 improvement; divestiture of Game Stop is making year-over-year financial
comparisons easier
14 RadioShack Fort Worth, Texas 4,841,200 4.1 337,200 13.0 6,834 -2.4
Cut the ribbon on StoreOne, part of Riverfront headquarters campus in Fort Worth; 10,000-sq.-ft. store is an interactive, hands-on technology educa-
tion experience for customers
15 Big Lots Columbus, Ohio 4,375,072 4.8 25,682 -68.4 1,502
Struggling in first half: cut back advertising, which hurt sales, led to markdowns to move inventory and depressed margins; KB Toys bankruptcy
4.9
ramifications still down the road
16 Ross Stores Pleasanton, Calif. 4,239,990 8.1 168,541 -25.3 639 12.5
Menswear has underperformed leading to disappointing Father’s Day sales in June; seasonal merchandise has also been below plan so earnings
forecasts have been lowered a notch
17 CompUSA Dallas 4,175,000* 0.6 N.A. — 225 0.0
CompUSA/Good Guy megastores (16 in all) opened in June in Seattle, Los Angeles, San Francisco, Sacramento and Portland, Ore.; still has 50
Good Guys, 230 CompUSA stores
18 Borders Group Ann Arbor, Mich. 3,903,000 4.6 131,900 14.5 1,209 -1.3
Lost in legal ruling by appeals court in San Francisco that state can demand sales tax collection on e-sales even though online division has no prop-
erty in California
19 Advance Auto Parts Roanoke, Va. 3,770,297 7.9 187,988 50.5 2,652 4.5
Chairman Larry Castellani turns CEO reins over to Mike Coppola as No. 2 auto aftermarket retailer takes impressive strides in gaining on top dog
AutoZone
20 Michaels Stores Irving, Texas 3,393,251 9.8 201,809 13.5 1,012 4.7
Consciously implementing Wal-Mart’s strategy of surrounding a city prior to opening urban locations; first NYC stores in Brooklyn and Queens after
building in northern N.J. and on Long Island
N.A. – Not available *Estimate
WWW.STORES.ORG STORES AUGUST 2005 S5

6. TOP 1OO
SPECIALTY RETAILERS
35
With its modernistic glass- Suggestive images
and-metal decor, Escape is de- push product at
signed for young adult city- Abercrombie &
dwellers who are already Fitch, while Pep
conversant with consumer Boys rev sales with
electronic technology. The lo- more traditional
cation, in Chicago’s Lincoln sales engines.
Park neighborhood, offers the
newest gadgets and latest editions of games, which
can be tested on consoles installed in booths. The
consoles can be rented by the hour and can also be
networked for group playing.
“We are in the process of reinventing what Best
Buy means to its customers,” says CEO Brad H. An-
derson, adding that the company is “finding new
ways to serve diverse customer groups.” Whether
these concept stores are rolled out as chains is an-
other question, however, since profitability is an is-
sue.
“Initially, we care more about what we learn than
the economic model of those strategies,” Anderson
concedes.
One Best Buy concept that is being rolled out in-
31
volves the Geek Squad, techies who provide support
for consumers having problems dealing with tech-
nology. After a successful test of freestanding loca-
S6 STORES / AUGUST 2005 WWW.STORES.ORG

7. TOP 1OO SPECIALTY RETAILERS
Company Headquarters 2004 Revenues Y/Y 2004 Earnings Y/Y No. of Y/Y
Rank
Comment (000) Change (000) Change Stores Change
21 PETsMART Phoenix $3,360,000 12.1% $171,100 22.6% 726 12.9%
Americans are fond of their pets and willing to spend on them as results show in both top and bottom lines; now trying to bolster share price with
stock buyback
22 Burlington Coat Factory Burlington, N.J. 3,171,000 11.9 N.A. — 362 3.7
With Monroe Milstein, chairman/CEO of family-run firm now 77, company brings in Goldman Sachs to explore strategic alternatives; Wall Street
applauds move
23 Williams-Sonoma San Francisco 3,136,931 13.9 180,087 14.6 552 7.8
Store openings include recycling Pottery Barn locations into Hold Everything stores; CEO Ed Muller says, “West Elm, over time, has the potential to
become our largest brand.”
24 Luxottica Retail Cincinnati 2,892,712 27.8 386,857 20.9 5,500 5.8
After spending $500 million for Cole National, former head offices in Twinsburg, Ohio, have been closed and everything moved to Lenscrafters HQ in
southern part of state
25 Linens ‘n Things Clifton, NJ 2,661,469 11.1 63,142 -15.6 492
After forecasting losses for this year’s Q2, company pins hopes on successful back-to-school season and fall launch of 600-sku collection by
11.8
Oprah’s Nate Berkus
26 Payless ShoeSource Topeka, Kan. 2,656,500 -0.2 (2,000) — 4,640 -8.4
Matthew Rubel, former executive vice president at J. Crew and CEO at Nike’s Cole-Haan division, takes CEO post in Topeka after Steve Douglas
vacates both CEO and chairman posts in July
27 Berkshire-Hathaway Retail Omaha 2,601,000 12.5 163,000 -1.2 370 0.8
Though Warren Buffett prefers to take a low-profile approach with chains, Kansas City-based Helzberg Diamonds wants to ramp up attention with
new creative communications agency
28 Sports Authority Englewood, Colo. 2,435,863 38.4 34,150 108.7 392
After a two-year incubation, positive results start to flow from Gart merger as sales begin to build and margins rise; is Dick’s growing enough to
2.1
challenge for top spot in segment?
29 Charming Shoppes Bensalem, Pa. 2,332,334 2.0 67,242 65.5 2,221 -0.3
Good last year, looking for more this year; acquisition of Crosstown Traders enhances multi-channel capabilities as Lane Bryant margins rise and
Catherine’s posts double-digit comps
30 Zale Dallas 2,304,440 4.2 106,473 — 2,235
Direct sourcing has led to improved margins during FY ended in July; company also imposed “operating disciplines” to bolster bottom line,
0.0
says CEO Mary L. Forte
31 Pep Boys Philadelphia 2,272,896 6.5 23,579 — 595 0.0
With 130 remodels done in two largest markets, 46 had grand re-openings in Philadelphia in June; stores remerchandise and there’s new emphasis
on service offerings
32 Tiffany New York 2,204,831 10.2 304,299 41.2 150 6.4
Indicative of historic Atlantic City’s new-found panache, Tiffany plans opening at The Pier at Caesar’s next year; also growing in Pacific Rim with new
store in Brisbane, Australia
33 Dick’s Corapolis, Pa. 2,109,399 43.4 66,909 26.7 234 43.6
Sported 3.2% same-store sales gains in Q1 2005, but real challenge comes from improving performance of Galyan units acquired last year; if not,
Wall Street will turn quickly
34 Sterling Jewelers Akron, Ohio 2,060,000 9.9 274,000 7.7 1,156 4.8
Largest unit of UK-based Signet, Sterling’s Kay Jewelers chain opened its first New York City store in June in the vicinity of Macy’s flagship Herald
Square store
35 Abercrombie & Fitch New Albany, Ohio 2,021,253 18.4 217,489 6.0 787 12.4
Always edgy, sometimes controversial but moving full steam ahead right now; Hollister units have been impressive in early 2005, with plans for
Europe and Japan in next two years
36 Electronics Boutique West Chester, Pa. 1,989,382 24.2 52,287 14.3 1,977 29.4
Being acquired for $1.4 billion by Game Stop, even as it enters Iberian market with its own takeover of Jump Ordenadores of Valencia with 141 loca-
tions in Spain
37 Pier 1 Imports Fort Worth, Texas 1,897,853 1.6 60,457 -48.8 1,258 6.7
Positive testing in Columbus, Ohio, and Las Vegas last fall led to spring launches of 84-page catalogs, as much to drive traffic into stores as to sell
direct to consumers
38 American Eagle Outfitters Warrendale, Pa. 1,881,241 31.1 213,991 256.7 846 -6.5
Regained footing with move back to marketing to teens; exposure on MTV’s Real World Austin hasn’t hurt, but will it carry through the rest of the
year?
39 AnnTaylor New York 1,853,583 16.7 63,277 -37.2 743 14.1
Moved head offices from retail-friendly 57th Street to frenzied Times Square as new CEO Kay Krill tries to replicate in main chain what she did for
the Loft division stores
40 Game Stop Grapevine, Texas 1,842,806 16.7 60,926 -4.0 1,826 20.6
Acquisition of Electronics Boutique will create a $3.8 billion video game behemoth, but the specialty store entity will still rank behind Wal-Mart in total
category sales
N.A. – Not available
WWW.STORES.ORG STORES AUGUST 2005 S7

8. TOP 1OO
SPECIALTY RETAILERS
57
tions in California, the Geek Squad is being
expanded over the next 12 to 18 months to
as many as 50 stand-alone sites. These 1,500-
sq.-ft. units won’t carry any merchandise, but
will serve as launching pads from which tech-
nicians are dispatched to businesses and
homes with technology problems.
“We would like to claim for Geek Squad a
position as the premier national computer
service provider,” Anderson says.
Best Buy isn’t putting all of its diversifica-
tion eggs in the single basket of freestanding
formats. In June, the company created two
“store-within-a-store” concepts at 45 Best 6
Buy locations in 12 cities. The Magnolia
Home Theater store offers state-of-the-art
home theater systems, as well as design servic- The upcoming Best Buy for Business, offers professional consulta-
es and professional installations. (The Mag- holiday season will tion to small business owners, as well as products
nolia appellation comes from the name of a be critical for both such as electronic notebooks and network servers.
West Coast-based retailer Best Buy acquired music retailers like Still another lifestyle effort by Best Buy, one ad-
several years ago.) FYE and toy sellers dressing the consolidation of the nation’s drug store
The other new store-within-a-store effort, like Toys “R” Us. industry, involves a joint venture with Minneapolis-
S8 STORES / AUGUST 2005 WWW.STORES.ORG

9. TOP 1OO SPECIALTY RETAILERS
Company Headquarters 2004 Revenues Y/Y 2004 Earnings Y/Y No. of Y/Y
Rank
Comment (000) Change (000) Change Stores Change
41 TJX U.S. Specialty Framingham, Mass. $1,835,123 38.8% ($5,264) — 378 34.5%
Flagship HomeGoods topped $1 billion in sales for first time last year but overall performance was disappointing; still planning rollout of freestanding
HomeGoods next to T.J. Maxx, Marshalls
42 Jo-Ann Stores Hudson, Ohio 1,812,400 4.5 46,200 15.2% 850 -4.7
Superstores, now generating nearly 40% of total volume and out performing traditional units; 40 of the larger stores opening this year as 14 smaller
stores have been shuttered
43 Petco Animal Supplies San Diego 1,812,145 12.5 83,673 29.3 335 -48.8
Back in Nasdaq's good graces after delay in filing annual, quarterly reports almost resulted in delisting this spring; company can now concentrate on
upgrading communications infrastructure
44 Hollywood Entertainment Portland, Ore. 1,782,364 5.9 71,288 -11.0 2,006 4.5
As with so much of what Hollywood is about, been searching for partner with deep pockets: first Leonard Green & Partners, then Blockbuster, before
settling on Movie Gallery
45 O’Reilly Automotive Springfield, Mo. 1,721,241 13.9 146,050 45.9 1,249 12.6
Operating with co-presidents Greg Henslee and Ted Wise as O’Reilly family establishes succession plan for company with stores from Carolinas to
Kansas; Gulf to Great Lakes
46 Talbots Hingham, Mass. 1,697,843 4.5 96,396 -7.9 1,049 6.4
Competitors step up pressure by also targeting 40-something women; Talbots responds with more flair and trend among its classic offerings; plans to
open 50 stores this year
47 Retail Brand Alliance New York/Enfield,Conn. 1,650,000 10.0 N.A. — — —
Closed 84-unit August Max and put both Casual Corner chain and Carolee Designs up for sale; more profitable Brooks Bros. grows internationally
and gets more attention
48 CSK Auto Phoenix 1,577,460 0.0 36,881 241.6 1,134
In cost-cutting mode to “provide us with operating leverage as our same-store sales improve,” says Chairman and CEO Maynard Jenkins,
1.8
company is opening 50 new stores
49 Cabela’s Sidney, Neb. 1,555,974 11.7 97,215 14.5 10 11.1
Less than a third of sales come at retail in segment that includes Bass Pro Shops and Gander Mountain; opened stores in Fort Worth and Austin,
Texas, markets this year
50 Men’s Wearhouse Houston 1,546,679 11.1 71,032 35.8 707 2.0
Performance has been improving along with the nation’s economy (demand for men’s suits increased during this period) and the formalwear rental
business is along for the ride
51 Guitar Center Westlake Village, Calif. 1,513,172 18.7 63,425 72.1 138
The country’s largest retailer of musical instruments — not that there’s much competition — saw sales and earnings grow by double digits
11.3
in Q1 this year; acquiring Music & Arts Center
52 IKEA Plymouth Meeting, Pa. 1,500,000* 7.1 N.A. — 22
Stepping up pace of North American expansion to 4-5 new stores a year while looking at new markets such as Atlanta, Dallas and Phoenix;
22.2
also targeting small business customers
53 Stein Mart Jacksonville, Fla. 1,459,607 8.0 37,973 1,625.3 261 0.0
Selling more goods at full price, with ladies’ apparel, accessories and menswear all showing strength this year; closed five stores in Q1 and pushing
some openings back to 2006
54 General Nutrition Centers Pittsburgh 1,344,700 -5.9 — — 2,642
Since director Robert J. DiNicola (late of Zale’s jewelers) took over as interim chairman in December, company has made several short-term
-3.9
changes while laying longer-term plans
55 Bass Pro Shops Springfield, Mo. 1,400,000* 10.0 N.A. — 26 12.0
Cavernous locations are part emporium, part museum; opened in Macon, Ga., in January with another due in San Antonio by year’s end; first Cali-
fornia store set for 2007
56 L.L. Bean Freeport, Maine 1,410,000 8.9 N.A. — 16 0.0
Coming off strong year in 2004, Bean plans to add six stores — more than in any one year previously — in the New England/Mid-Atlantic region by
end of 2007
57 TransWorld Entertainment Albany, N.Y. 1,365,100 2.6 41,800 81.0 800 -3.9
Video games, accessories pick up slack for sluggish performance of new music and DVD releases, says chairman/CEO Robert Higgins; digital
download strategy still being devised
58 Polo Ralph Lauren New York 1,348,645 15.2 190,425 12.5 278
Regained control of many of labels and lines that had been licensed; quickening growth with 50-60 domestic and 20-25 European stores
5.7
59 Famous Footwear Madison, Wis. 1,308,600 3.6 60,300 16.4 1,275 -0.6
Parent Brown Shoe reorganized branded shoe stores, closing 80 Naturalizer units while opening 30 outlet stores, but Famous chain is the engine
that drives retail operations
60 Hobby Lobby Oklahoma City 1,300,000* 8.3 N.A. — 345
Closing locations on Sunday doesn’t seem to have slowed growth of what are now called “creative centers” rather than stores, with 15 more
7.8
slated to open prior to year’s end
N.A. – Not available *Estimate
WWW.STORES.ORG STORES AUGUST 2005 S9

10. TOP 1OO
SPECIALTY RETAILERS
3
based PrairieStone Pharmacy and Park
Nicollet Health Services into wellness and
health care electronic gadget retailing —
everything from air purifiers to sphygmo-
manometers.
All of this comes amidst a push by Best Buy
to grow to as many as 1,200 stores in North
America and begin opening stores in China
before the end of 2006. The company, which
has about 850 stores in the United States and
Canada, has been opening about 75 loca-
tions annually in recent years. That pace will
quicken as the company begins to open more
compact, 20,000-sq.-ft. units in smaller mar-
38
kets and big city neighborhoods.
The push into China involves “lab stores,”
which the company describes as “a way to
accelerate learning about the diverse consumers” in that trying to figure out where they will sell clothing after suf-
country, where the company currently has three sourcing fering through years of sluggish sales and diminishing re-
offices. turns.
Apparel retailers, led by No. 2 Gap and No. 8 Limited, Domestic apparel sales grew steadily though the 1990s,
form the largest subset of the Top 100 Specialty Retailers. hitting a high of nearly $176 billion in 2000, according to
Right now, garment manufacturers — still reeling from the market research firm NPD Group. The trends have not
Kmart-Sears merger and Federated Department Stores’ been very positive since then, however. Annual sales fell
blockbuster acquisition of May Department Stores — are each year from that 2000 peak until 2004 when, NPD re-
S10 STORES / AUGUST 2005 WWW.STORES.ORG

11. TOP 1OO SPECIALTY RETAILERS
Company Headquarters 2004 Revenues Y/Y 2004 Earnings Y/Y No. of Y/Y
Rank
Comment (000) Change (000) Change Stores Change
61 Claire’s Stores Pembroke Pines, Fla. $1,279,407 12.9% $143,124 24.4% 2,840 1.1%
Costume jewelry and accessories offerings were strong last year and have continued to show well early in 2005; European stores, emulating U.S.
trends, also sport positive comps in first half
62 Goody’s Family Clothing Knoxville, Tenn. 1,266,993 3.3 15,653 -11.4 358 6.9
Exited Charlotte, N.C., market in January with first store closings in more than a year, though it still has 46 units in Tar Heel state with another outlet
opening this fall
63 Stage Stores Houston 1,243,851 27.9 53,676 -2.4 528 1.9
7 of 10 new stores opened this year are Peebles units as division outperforms Beall’s and Stage stores; distribution functions moved from Knoxville,
Tenn., to South Hill, Va.
64 Pacific Sunwear Anaheim, Calif. 1,229,762 18.1 105,892 32.6 990 12.9
Planning a larger prototype (8,000 sq. ft. vs. current 3,600 sq. ft.) for surf-and-skate styles with an eye on 1,400 stores and $2 billion in sales by the
end of 2007
65 Finish Line Indianapolis 1,166,767 18.3 61,263 29.6 605 13.9
Q1 earnings up 24%, sales 13% as selling space grew 12%; new prototype for Man Alive chain — now 38 stores strong — selling men’s and ladies’
hip hop fashions
66 Children’s Place Secaucus, N.J. 1,157,546 45.1 43,264 88.5 1,056
Bought 313 Disney Stores last fall with commitment to spend $100 million upgrading them and paying licenses to Disney; now the chain is
52.8
expanding into outlet shopping centers
67 P.C. Richard Farmingdale, N.Y. 1,125,000* 7.1 N.A. — 49 4.3
Largest of the country’s family-owned-and-operated retailers selling major appliances and consumer electronics; service, repairs and contractor
sales also part of equation
68 Genesco Nashville 1,112,681 32.9 48,401 -83.2 1,618
Journeys is the best performer among the footwear chains, while Hat World continues to dazzle with 7% comps in Q1, even up against a 23%
55.6
same-store sales rise in prior year
69 Chico’s FAS Fort Myers, Fla. 1,066,882 38.8 141,206 40.9 668 21.2
Grew from $250 million volume in 2000 to more than $1 billion last year; CEO Scott Edmonds sees the next billion coming even faster, starting with
100 new stores this year
70 New York & Co. New York 1,040,028 8.1 18,106 8.7 477 1.7
Former Limited Inc. chain was sold to Bear Stearns Capital II and then taken public last year; strong accessories sales helped boost comps 7.2%
during 2004
71 Eddie Bauer Redmond, Wash. 1,000,000* -43.5 N.A. — 418 -7.5
All that’s left of Spiegel Inc.; the venerable catalog is no more, and former owner Michael Otto is out of the post-bankruptcy picture; home division
shut stores
72 Aeropostale New York 964,212 31.2 84,112 55.0 561 21.4
18-year-old chain charging along in value-priced apparel for teens segment as fashion-follower able to get trends into stores quickly; lot of room to
grow in Calif., Fla. and Texas
73 Crate & Barrel Northbrook, Ill. 925,000* 5.7 N.A. — 130
Gordon Segal wants to stay “entrepreneurial” as website gets high marks for its shopping experience; opened a fourth The Land of Nod
2.4
kids’ furniture and accessories location
74 Cost Plus Oakland, Calif. 908,560 13.3 30,221 -7.5 236 13.5
Q1 was tough as comps dipped 1.9%, but new store openings are on schedule and overall sales continue to grow; CEO search on to succeed
retiring Murray Dashe
75 Tuesday Morning Dallas 897,841 9.1 62,617 16.7 662 14.7
Aiming at 1,000 stores by 2010 and rethinking merchandising approach to appeal to younger shoppers; sales events remain, but stores don’t close
as often as they once did
76 Recreational Equipment Kent, Wash. 887,807 10.2 315 32.4 78
Adding stores and expanding catalog distribution as it ventures beyond mountain-climbing gear origins to generic outdoor sporting goods
2.6
and apparel, though house brands dominate
77 Academy Sports Houston 850,000* 7.5 N.A. — 80 14.7
With lack of national powerhouse in sporting goods specialty segment, long-time Texas leader has been growing at double-digit rate for the last 15
years
78 Urban Outfitters Philadelphia 827,800 50.9 90,489 87.1 142 25.7
Three chains — Urban Outfitters, Anthropologie and Free People — with no two stores alike, brags founder/CEO Richard Hayne, in narrow-focusing
on niche markets for under 45s
79 J. Crew New York 804,000 16.5 (100,000) — 198 1.0
With Mickey Drexler at helm, company turned red ink to black in Q1 with a 37% jump in same-store sales; expense controls also influenced bottom
line performance
80 H.H. Gregg Indianapolis 803,199 6.6 29,248 3.7 60 9.1
Consumer electronics and appliance dealer got sales boost from five new stores in Atlanta and other Southeastern markets; adding seven stores in
the Carolinas this year
N.A. – Not available *Estimate
WWW.STORES.ORG STORES AUGUST 2005 S11

12. TOP 1OO
SPECIALTY RETAILERS
46
ports, they rose 4 per- Women’s apparel
cent — but for a total of sales continue to
only $173 billion. plod along, while
In addition to stagnant personal products
sales, there has been de- and home acces-
flation in the prices con- sories keep regis-
sumers have paid for ters humming.
clothing, which have de-
clined in each of the last six years, according
to the federal Bureau of Labor Statistics.
With shrinking numbers of department
stores and other large dry goods retailers sell-
ing clothing and the increased pressure on
manufacturers to find new outlets for their
wares, the landscape would appear favorable
for apparel-selling specialty stores. In light of
the elimination of import quotas for sourc-
ing garments from around the world, multi-
8
ple-format operators such as Limited and
Gap should be upbeat, if not ecstatic.
Such is not the case, however.
The truth is that apparel sales are falling as a percentage Tops, bottoms, suits, slacks, shirts and skirts are not the
of total sales at Limited, and its clothing chains are actual- future of Limited, Leslie Wexner told shareholders this
ly a drag on earnings. Limited, which has opened and spring. “We’ve reinvented ourselves completely. We are
closed, bought and sold more retail formats and addressed now predominantly a personal care, beauty and lingerie
more lifestyle needs than any other specialty store opera- company,” he said, noting that non-intimate apparel ac-
tor, is going through its own extreme makeover. counted for just 29 percent of 2004 sales, while personal
S12 STORES / AUGUST 2005 WWW.STORES.ORG

13. TOP 1OO SPECIALTY RETAILERS
Company Headquarters 2004 Revenues Y/Y 2004 Earnings Y/Y No. of Y/Y
Rank
Comment (000) Change (000) Change Stores Change
81 Movie Gallery Dothan, Ala. $791,177 14.3% $49,488 0.1% 2,482 15.0%
Picked up where Blockbuster left off in bidding for rival Hollywood Entertainment; acquisition gives company West Coast base and moves it out of
rural, small-town markets
82 Haverty Furniture Atlanta 784,162 5.3 22,754 -10.2 118 4.4
Results have been upbeat so far this year, with total sales up 8.1% in first half and same-store sales up 3.5% as management looks for more and a
strong finish to 2005
83 Jones Apparel Retail New York 780,300 13.8 N.A. — 1,037 4.7
Cognescenti suggesting acquisition of Barneys New York signals rapid growth for the retailer and a major directional shift for apparel maker in light
dust-up with Ralph Lauren
84 Big 5 Sporting Goods El Segundo, Calif. 778,905 9.7 34,259 30.3 309 5.5
Athletic footwear was star performer as company posted 37th consecutive quarter of positive same-store sales results; opening 16-20 new stores
this year in western markets
85 Cato Charlotte, N.C. 773,809 5.7 34,607 10.3 1,177 6.8
Consolidating house-brand apparel under the Cato label while focusing on emerging fashion trends and colors; reorganizing product development
and sourcing functions
86 Tweeter Home Ent. Canton, Mass. 771,553 -2.0 (11,662) 0.0 176 1.1
Quit franchise deal with Bang & Olufsen; opened prototype architecture unit in Las Vegas last January that includes offerings of supplier/partners
Hewlett Packard, Microsoft
87 Sharper Image San Francisco 760,003 17.4 14,650 -36.6 175 17.4
Rough start to 2005 — a “transition year,” says CEO Richard Thalheimer — but high expectations for new merchandise lines being unveiled this fall,
including MP3 devices
88 KB Toys Avon/Pittsfield, Mass. 750,000* -10.0 — — 900 -18.2
Planning to emerge from Chapter 11 bankruptcy protection in time for this year’s holiday selling season; has closed 600 stores since filing bankrupt-
cy petition in January 2004
89 Dress Barn Suffern, N.Y. 754,903 6.8 30,141 274.7 776 0.5
$350 million acquisition of 470-store Maurices chain in January depressed earnings, but adds about $200 million in annual sales for FY ended July
30, 2005
90 Fry’s Electronics Palo Alto, Calif. 700,000* 2.9 — — 28
Legendary Silicon Valley old-timer stays on cutting edge to meet demands of loyal customer base and innovative merchandise buying and
3.7
presentations
91 Modell’s New York 700,000* 7.7 — — 130 1.6
Though sporting goods is part of official company name, athletic footwear, sporting apparel and other menswear are part of the mix in its East Coast,
often urban locations
92 J&R Music/Comp. World New York 700,000* 7.7 N.A. — 6
Music, computers, audio and video are all part of lower Manhattan world — where half the sales are online or mail order — and now there are
0.0
housewares on the shelves
93 BrandsMart USA Hollywood, Fla. 700,000* 9.4 — — 6 20.0
40,000 sku’s worth more than $8 million stuffed into each warehouse-sized store from Palm Beach County to Florida Keys including white goods,
brown goods, CE, small appliances and housewares
94 West Marine Watsonville, Calif. 682,379 3.2 25,534 27.1 376 8.7
Boating supplier in search of president/COO after Richard Everett announced intention to step down after 25 years; CEO Peter Harris assumed
president’s title and duties in June
95 Too Inc. New Albany, Ohio 675,834 12.9 41,364 83.4 568 2.7
Though TV campaign didn’t generate the buzz CEO Mike Rayden had hoped, higher margins boosted this year’s Q1 earnings to record level; Jus-
tice chain adding 50-60 units
96 Ultimate Electronics Thornton, Colo. 658,300 -7.7 N.A. — 62 -4.6
Sold 32 stores to CEO Mark J. Wattles in April for $43.8 million and assumption of liabilities; liquidating rest of chain and other assets after Chapter
11 filing Jan. 11, 2005
97 Hot Topic City of Industry, Calif. 656,468 14.8 39,673 -16.6 679 21.0
Testing Divastyle loyalty card for trendy 15- to 29-year-old set at Torrid, the company’s plus-size, fashion-forward women’s apparel and accessories
chain
98 Gander Mountain St. Paul, Minn. 642,140 31.2 (3,547) -77.6 82 7.3
Completed first year as a public company and plans to open 18-20 stores in 2005 in the competitive outdoor sporting goods segment; eyeing $850
million volume this year
99 Forever 21 Los Angeles 640,000 26.7 N.A. — 205 2.5
Growing quickly in both Forever 21 and Forever XXI formats, company purchased Gadzooks at bankruptcy sale and will operate 150 stores under
the Gadzooks name
100 Matt McCauley takes over as president, reporting to CEO/chair594,478 sales rose but income slipped in Q1, -61.4% red 646
Gymboree San Francisco
Lisa Harper;
8.2% 9,915
then turned in Q2
5.0
N.A. – Not available *Estimate
WWW.STORES.ORG STORES AUGUST 2005 S13

14. TOP 1OO
SPECIALTY RETAILERS
SPECIALTY
A QUARTER-CENTURY OF
STORE
GROWTH
1981
Company (Headquarters) 1980 Sales Number
(000) of Stores
Petrie Stores (Secaucus, N.J.) $479,000 697
U.S. Shoe Apparel (Cincinnati) 373,700 620
73
Gap Stores (San Bruno, Calif.) 369,800 472
Limited Stores (Columbus, Ohio) 265,300 322
Miller-Wohl (Secaucus, N.J.) 201,700 268 care generated 30 percent and Crate & Barrel
Edison Bros. Apparel (St. Louis) 185,900 772 lingerie 41 percent. A decade gives nod to kids-
Melville Retail Apparel (Rye, N.Y.) 171,000 527 earlier, apparel accounted for focused concept,
Brooks Fashion Stores (New York) 148,200 401 71 percent of sales, intimate ap- while "operating
W.R. Grace Retail Apparel (New York) 139,000 204 parel 25 percent and personal disciplines" have
Charming Shoppes (Bensalem, Pa.) 126,100 202 bolstered the bottom
T
care products just 4 percent.
More telling is the fact that in line at Zale.
itled the “Specialty Store Showcase” and including only 2004, roughly two-thirds of
clothing stores, the proto-specialty retail store survey Limited’s sales — and virtually all of its earnings —
was created by STORES editor Joan Bergmann and New York were rung up by Victoria’s Secret and Bath & Body
Timesman Isadore Barmash, who had previously worked Works. The situation hasn’t changed much so far this
together at Home Furnishings Daily. year. Poor performance at the Limited and Express
Unlike subsequent clothing chains pulled down corporate earnings in the
Top 100 surveys, this first quarter, prompting the company to lower full-
showcase listed, in year expectations.
alphabetical order, Part of Limited’s transformation/reinvention has
only nine chains and been precipitated by the consolidation in the drug
four conglomerates. store and supermarket industries, where huge
The smallest compa- amounts of personal care and beauty products are
ny was Topps & sold each year. Thus, Limited’s C.O. Bigelow Apothe-
Trowsers at $19.4 million in volume. W.R. Grace was parent of cary is set to open six units later this year. Bath & Body
Berman’s, Shepler’s and Diana Shops. U.S. Shoe operated Works, which has just introduced the Breathe fra-
both women’s wear and menswear chains, the largest of grance and skin care line, will launch an online selling
which was Casual Corner. Edison Brothers, like U.S. Shoe, a site this fall. And just a couple of months ago, Limit-
footwear manufacturer whose shoe stores were not included ed bought Slatkin & Co., a maker of merchandise
in the study, operated chains such as Fashion Conspiracy, such as scented candles and potpourri.
Jeans West and Oak Tree, and Size 5-7-9. Clothing, even apparel intended for the mass mar-
Melville was a real conglomerate, operating CVS drug ket, is not yet at commodity status, but the consumer
stores and shoe chains like Thom McAn, but only its apparel loyalty that operators like the Gap have relied on for
divisions (Foxmoor, Clothes Bin, Chess King and Metro) were decades seems to have evaporated in the face of tough
included. competition from the likes of Wal-Mart and Target,
fast-moving retailers like H&M and Forever 21 and
continued on page S15 highly-focused operations like Chico’s.
Gap has been in a turnaround mode for a couple of
S14 STORES / AUGUST 2005 WWW.STORES.ORG

15. TOP 1OO
SPECIALTY RETAILERS
S P E C I A L T Y S T O R E G R O W T H (continued)
1985
Company (Headquarters) 1984 Sales Number
(000) of Stores
Mervyn’s (Hayward, Calif.) $2,141,000 126
Radio Shack (Fort Worth, Texas) 2,133,000 4,717
Toys “R” Us (Rochelle Park, N.J.) 1,702,000 203
Marshalls (Woburn, Mass.) 1,190,000 209
Nordstrom (Seattle) 983,000 39
Petrie Stores (Secaucus, N.J.) 951,000 1,360
Saks Fifth Avenue (New York) 815,000 40
Levitz Furniture (Miami) 761,000 92
Neiman-Marcus (Dallas) 725,000 21
Lerners (New York) 700,000 800
30 T he fifth edition of the Top 100 Specialty Store Retailers
showcased both hardline and softline specialists, includ-
ing many operators that were not primarily mall-based
chains. Thus, fashion stores such as Nordstrom, Neiman-
years now, a period that has seen the departure of Marcus and Saks Fifth Avenue were included, even though
Mickey Drexler (who later resurfaced at J. Crew) and they looked like department stores and competed with
the dawn of the Paul Pressler era. Mistakes have been department stores but weren’t considered department stores
made, as Pressler readily admitted to securities ana- because they didn’t have furniture, toys, sporting goods,
lysts in May. appliances or luggage departments.
“At Gap, we are pleased with the progress we’ve Large-scale, promotions-driven apparel sellers such as
made in the menswear business, but are not yet satis- Marshalls and T.J. Maxx were included, as was Mervyn’s, the
fied with our women’s products,” Pressler said. “In West Coast brainchild of Merv Morris, who had sold the busi-
our efforts to serve more occasions for women, we ness to Minneapolis-based Dayton Hudson 10 years earlier.
broadened our merchandise and design perspective Dayton Hudson became Target, named for its large discount
going a bit outside Gap’s iconic aesthetic.” store division, and only last year did the company sell
By going for a bigger piece of the pie and falling flat Mervyn’s, to a group of privately-held investment firms. Com-
in the process, Gap saw first quarter earnings slip 6.7 piling the Top 100 with Bergmann was David P. Schulz, former
percent below last year’s opening period, as total sales editor of Chain Store Age Executive.
decreased 1.1 percent and comparable-store sales fell continued on page S16
4 percent. The closing of a number of stores during the
THE SPECIALTY STORE DEFINED
last fiscal year also contributed to the declines.
The STORES Top 100 Specialty retailers as discount stores, ware-
Without putting a name on it, Gap is continuing to
experiment with a lifestyle design that addresses con- Retailers is an annual survey that house clubs and dollar/closeout
sumers by gender rather than as unisexual, metrosex- provides a snapshot of leading stores, as well as supermarkets,
merchants whose offerings are lim- drug stores, convenience stores,
ited to a single category or closely- building materials dealers, auto
ual, asexual — or sexually confused. From a seven-
store test in the Denver area last fall, Gap is expanding related classifications of merchan- dealerships and service merchants
the concept to 10 locations in Connecticut and five in dise typically found in a traditional such as beauty salons, barber
full-line department store. Retailers shops, gasoline service stations
have evolved, merchandising and travel agencies.
the San Diego area.
Looking beyond apparel, Gap unveiled an acces- options have split and merged and The ratings on the chart are
sories-only store on New York’s Fifth Avenue, dis- re-split, and some new ones have determined by sales volumes and
come into existence since the sur- revenues as of the end of the 2004
vey was begun 25 years ago, so fiscal year. Estimates, where they
placing a babyGap adjacent to a full-line Gap store.
The 800-sq.-ft. space, called Love, was a holiday-in- distinctions that were once quite appear, are based on information
spired effort to promote new packaging and decor for clear may now have blurred. from company executives, consult-
Excluded from the specialty ants, industry observers, securities
store chart are such broadline analysts and/or vendors.
accessories that was intended to roll out to select Gap
stores. And moving into territory plowed by Limited,
WWW.STORES.ORG STORES AUGUST 2005 S15

16. TOP 1OO
SPECIALTY RETAILERS
S P E C I A L T Y S T O R E G R O W T H (continued)
1990
Gap has launched Gapbody, offering personal care,
beauty, fragrance and lingerie. Eleven Gapbody units
are slated to open this year.
Office supply stores are a small but strong niche,
Company (Headquarters) 1989 Sales Number claiming three of the first five spots on the Top 100
(000) of Stores Specialty Retailers chart. Ranked third, fourth and
Toys “R” Us (Rochelle Park, N.J.) $4,788,000 404 fifth, Staples is the largest, Office Depot is a rung be-
The Limited (Columbus, Ohio) 4,648,000 3,188 low and the extensively restructured OfficeMax —
Kinney Shoe (New York) 3,042,000 3,604 bulked with former Boise Cascade operations — is a
Radio Shack (Fort Worth, Texas) 2,940, 000 4,821 close third in sales volume.
Circuit City (Richmond, Va.) 2,097,000 149 As with all the office supply dealers, Staples is real-
Marshalls (Woburn, Mass.) 1,939,000 347 ly a conglomerate with direct-selling and small-busi-
T.J. Maxx (Framingham, Mass.) 1,677,000 352 ness operations, as well as a presence in several regions
Gap (San Bruno, Calif.) 1,587,000 960 around the globe. Even with its base of small- and
Petrie Stores (Secaucus, N.J.) 1,258,000 1,569 home-business customers, however, Staples addresses
U.S. Shoe Apparel (Cincinnati) 1,234,000 1,721 lifestyle issues in many of its efforts. A test of selling
B
office supplies in supermarket aisles was so successful
y the 10th year, the Top 100 Specialty Store Retailers that it began rolling out the concept in July to more
ranking was taking on an appearance that would be rec- than 550 Stop & Shop stores on the East Coast.
ognizable to today’s readers, with names such as Toys “R” Earlier this year, Staples opened its first stores in the
Us, Limited, Radio Shack and Gap clustered near the top of Chicago area, where it plans to have 20 units in oper-
the chart. Conglomerates were represented by their compo- ation by December and as many as 50 within the next
nents rather than as entities themselves; thus U.S. Shoe’s two or three years.
apparel stores — led by Casual Corner — rested in the 10th The Chicago stores are of the “Back to Brighton”
spot, while the shoe divisions were ranked in the 71st posi- type, named for the Massachusetts town where the
tion. Another U.S. Shoe subsidiary, holding down the No. 28 concept was unveiled four years ago. The model in-
rung, was LensCrafters. Kinney Shoe, and its Foot Locker volves enhanced customer service that includes a
chain, ranked third representing F.W. Woolworth, while the greater presence of store associates in areas where
five-and-dime retailer also owned 99th-ranked Little Folks shoppers tend to have more questions. There is also up-
apparel stores. New to the chart this year were West Coast graded technology consultation and assistance, and a
consumer electronics retailer The Good Guys, Clothestime, WiFi section in the store for the free use of customers.
Contempo Casuals, Gantos, Claire’s Stores and Circus World, In describing the store interior, Staples regional man-
a toy retailer. Merry-Go-Round was the hottest chain, jumping ager Bob Wolfe says, “We use
from No. 56 to No. 33 in one year. color schemes that serve to Talk about a pressure
catch the eyes of consumers cooker . . . OfficeMax
1995
across the store and include a holds the No. 5 spot,
number of lifestyle photos to trailing Staples
help tell a story.” at No. 3 and Office
Company (Headquarters) 1994 Sales Number OfficeMax is being reshaped Depot at No. 4 on
(000) of Stores following a convoluted evolu- the Top 100 list.
Toys “R” Us (Paramus, N.J.) $8,745,586 1,115
Limited (Columbus, Ohio) 7,320,792 4,867
Melville Specialty (Rye, N.Y.) 5,674,747 3,227
Circuit City (Richmond, Va.) 5,582,947 204
Best Buy (Eden Prairie, Minn.) 5,079,557 204
Tandy (Fort Worth, Texas) 4,943,679 6,920
Office Depot (Del Ray Beach, Fla.) 4,226,199 420
Woolworth Specialty (New York) 3,977,000 7,406
TJX (Framingham, Mass.) 3,842,818 1,098
Gap (San Francisco) 3,722,940 1,508
5
continued on page S17
S16 STORES / AUGUST 2005 WWW.STORES.ORG

17. TOP 1OO
SPECIALTY RETAILERS
S P E C I A L T Y S T O R E G R O W T H (continued)
W ith Rick Gallagher
now editor and pub- Electronics,
lisher of STORES, a lot was office supply
new about the 15th edition
stores rise to
prominence
of the Top 100 Specialty
Stores. Along with the NRF,
STORES had moved from
New York’s garment district to Washington, D.C.
Retail conglomerates with specialty store operations were
listed by total volume. No. 3 Melville, for example, sported an
impressive portfolio that included Marshalls, Wilsons House
66 of Leather, Bob’s Stores, Footaction, Thom McAn, Kay-Bee
Toys (as it was known then), Linens ’n Things and This End
Up, among others.
2000
tion over the past 18 months. The one-time Kmart
subsidiary based in Shaker Heights, Ohio, was taken
over by forest products company Boise Cascade,
which then shed its timber business, merged Office-
Max with its business products and services unit and Company (Headquarters) 1999 Sales Number
renamed the entire company OfficeMax. (000) of Stores
Earlier this year there was a major shakeup in the ex- Circuit City (Richmond, Va.) $12,614,390 658
ecutive suite, capped by the April arrival of Sam Dun- Best Buy (Minneapolis) 12,494,023 357
can as president and CEO. Duncan, former president Toys ‘R’ Us (Paramus, N.J.) 11,862,000 1,548
of Fred Meyer, had been head of ShopKo Stores until Gap (San Francisco) 11,635,462 3,018
it was sold to a private equity firm earlier this year. In Office Depot (Del Ray Beach, Fla.) 10,263,280 825
late June, Duncan added the duties of chairman. Limited (Columbus, Ohio) 9,723,334 2,913
Office Depot is also operating with new leadership. Staples (Westborough, Mass.) 8,842,460 1,129
In March, Steve Odland was recruited as chairman TJX (Framingham, Mass.) 8,795,347 1,357
and CEO. Odland had been chairman, CEO and pres- CompUSA (Dallas) 6,321,391 104
OfficeMax (Shaker Heights, Ohio) 4,842,698 946
A
ident at AutoZone.
Both Office Depot and OfficeMax have been ramp-
ing up store openings in order to keep pace with Sta- new century was dawning, and the Top 100 Specialty
ples. Office Depot is opening as many as 60 stores this Store Retailers reflected the technology bubble that had
year, primarily in the Northeast and New England. yet to burst.
Office Depot made a similar move into the same ter- Consumer electronics specialists Circuit City and Best Buy
ritory in 1998, only to close many of the stores with- ranked first and second on the chart. Office supply retailers
in a couple of years. Many of the new stores Office De- — no small sellers of computers and other electronic
pot is opening are former Kids “R” Us locations machines themselves — nailed down three of the Top 10
spots.
There were signs of change elsewhere on the chart, as
well. Resting in the 11th position was Venator, the venerable
former F.W. Woolworth en route to becoming what it is today
— Foot Locker.
Limited, which has long been an incubator of retail con-
cepts, had spun off the Victoria’s Secret stores and catalog
and a few other concepts into a company called Intimate
Brands, ranked No. 12 with sales of $4.5 billion. Just a couple
of years later, Limited brought Intimate Brands back into the
fold and the recombined company was called Limited Brands.
WWW.STORES.ORG STORES AUGUST 2005 S17

18. TOP 1OO
SPECIALTY RETAILERS
I
THE ECONOMY WILL IMPROVING CONSUMER CONFIDENCE BOOST SALES?
nflation may or may not be on the move, but don’t count cerns remaining relatively steady, there is little reason to
on Alan Greenspan and the Federal Reserve to provide expect a dramatic shift in consumer spending.”
any clear guidance. The board raised the federal funds Consumer prices have moderated since the beginning of
rate 0.25 percent on June 30, but didn’t provide a lot of the year — actually declining in May for the first time in 10
explanation for the move, much less enlightenment as to months — while the economy as a whole has exhibited
where the economy might be headed for the second half of slow-but-steady growth.
this year. While most observers feel the Fed will continue to raise
For retailers who watch what shoppers are doing, how- the funds rate (perhaps to 4 percent by the end of the
ever, the news is that consumer confidence hit a three-year year), how this impacts consumer spending and retailers’
high in June, moving up to 105.8 on the monthly index prospects for the second half of 2005 is the question of the
developed by the Conference Board, a New York-based moment.
economic research organization. The June uptick came on “Despite fears that consumers are finally throwing in the
the heels of a rise to 103.1 in May. towel, [June’s] results show that consumers’ desire to
“The improvement in consumers’ mood suggests that shop remains intact,” says Steve Spiwak, an economist
business activity and labor market activity will continue to with market research firm Retail Forward. “Job growth,
pick up over the next several months,” says Lynn Franco, home buying and the recent stock market run-up are pro-
director of the Conference Board’s Consumer Research viding a solid foundation for near-term spending
Center. “And with consumers in better spirits and job con- prospects.”
acquired from Toys “R” Us last year. Buy after transforming itself from Wards stores during the
Four of the Top 10 specialty store retailers are living on go-go electronics years — is another company in search of
past glory and struggling to remain relevant in the 21st cen- a successful operating plan. Earlier this year, the company
tury: Toys “R” Us (6), Circuit City (7), Blockbuster (9) and announced the closing of 19 superstores, five regional of-
AutoZone (10). fices and a distribution center. The shuttered stores showed
Toys “R” Us has been downsizing for more than a year “no reasonable expectations of positive cash flow and
as its status as category killer continues to diminish. Wal- [were] without relocation opportunities over the near
Mart surpassed TRU several years term,” says W. Alan McCullough,
16
ago as the nation’s largest seller of chairman and chief executive of Cir-
toys. TRU’s management had been cuit City.
searching for new directions, but ap- Ever since its unsuccessful attempt to
parently not successfully or fast take over rival Hollywood Entertain-
enough for a consortium of private ment, Blockbuster has become a bat-
investors, which offered shareholders tleground for deep-pocketed investors.
a price premium for their common With the video rental market shrink-
stock to take the company private. ing in the face of online direct-delivery
Once the purchase was finalized in competition, billionaire financier Carl
June, chairman and CEO John Eyler Icahn fought his way onto Block-
and COO Christopher Kay left TRU. buster’s board of directors specifically
Investment companies Bain Capital to make the company more receptive
and Kohlberg Kravis Roberts, togeth- to putting itself up for sale.
er with Vornado Realty Trust, have AutoZone has come under fire for
not said what they plan to do with the failing to keep up the appearance of
company. But Michael Souer, an ana- its stores and being inattentive to cus-
lyst with Standard & Poor’s, observes tomers in favor of paying off credi-
that the new owners “obviously think tors. St ORES
the company is worth a lot more and
perhaps [former] management was David P. Schulz, a New York-based
39
the problem in realizing that share- writer and editor, reports on U.S.
holder value.” and foreign retailers for several pub-
Circuit City — once larger than Best lications.
S18 STORES / AUGUST 2005 WWW.STORES.ORG

19. TOP 1OO SPECIALTY RETAILERS
COMPANY HEADQUARTERS RANK COMPANY HEADQUARTERS RANK
Abercrombie & Fitch New Albany, Ohio 35 Hot Topic City of Industry, Calif. 97
Academy Sports Houston 77 IKEA Plymouth Meeting, Pa. 52
Advance Auto Parts Roanoke, Va. 19 J&R Music/Computer World New York 92
Aeropostale New York 72 J. Crew New York 79
American Eagle Outfitters Warrendale, Pa. 38 Jo-Ann Stores Hudson, Ohio 42
AnnTaylor New York 39 Jones Apparel Retail New York 83
AutoZone Memphis, Tenn. 10 KB Toys Avon/Pittsfield, Mass. 88
Barnes & Noble New York 13 L.L. Bean Freeport, Maine 56
Bass Pro Shops Springfield, Mo. 55 Limited Columbus, Ohio 8
Bed Bath & Beyond Union, N.J. 12 Linens ‘n Things Clifton, NJ 25
Berkshire-Hathaway Retail Omaha 27 Luxottica Retail Cincinnati 24
Best Buy Minneapolis 1 Men’s Wearhouse Houston 50
Big 5 Sporting Goods El Segundo, Calif. 84 Michaels Stores Irving, Texas 20
Big Lots Columbus, Ohio 15 Modell’s New York 91
Blockbuster Dallas 9 Movie Gallery Dothan, Ala. 81
Borders Group Ann Arbor, Mich. 18 New York & Co. New York 70
BrandsMart USA Hollywood, Fla. 93 Office Depot Delray Beach, Fla. 4
Burlington Coat Factory Burlington, N.J. 22 OfficeMax Itasca, Ill. 5
Cabela’s Sidney, Neb. 49 O’Reilly Automotive Springfield, Mo. 45
Cato Charlotte, N.C. 85 P.C. Richard Farmingdale, N.Y. 67
Charming Shoppes Bensalem, Pa. 29 Pacific Sunwear Anaheim, Calif. 64
Chico’s FAS Fort Myers, Fla. 69 Payless ShoeSource Topeka, Kan. 26
Children’s Place Secaucus, N.J. 66 Pep Boys Philadelphia 31
Circuit City Richmond, Va. 7 Petco Animal Supplies San Diego 43
Claire’s Stores Pembroke Pines, Fla. 61 PETsMART Phoenix 21
CompUSA Dallas 17 Pier 1 Imports Fort Worth, Texas 37
Cost Plus Oakland, Calif. 74 Polo Ralph Lauren New York 58
Crate & Barrel Northbrook, Ill. 73 RadioShack Fort Worth, Texas 14
CSK Auto Phoenix 48 Recreational Equipment Kent, Wash. 76
Dick’s Corapolis, Pa. 33 Retail Brand Alliance New York/Enfield,Conn. 47
Dress Barn Suffern, N.Y. 89 Ross Stores Pleasanton, Calif. 16
Eddie Bauer Redmond, Wash. 71 Sharper Image San Francisco 87
Electronics Boutique West Chester, Pa. 36 Sports Authority Englewood, Colo. 28
Famous Footwear Madison, Wis. 59 Stage Stores Houston 63
Finish Line Indianapolis 65 Staples Framingham, Mass. 3
Foot Locker New York 11 Stein Mart Jacksonville, Fla. 53
Forever 21 Los Angeles 99 Sterling Jewelers Akron, Ohio 34
Fry’s Electronics Palo Alto, Calif. 90 Talbots Hingham, Mass. 46
Game Stop Grapevine, Texas 40 Tiffany New York 32
Gander Mountain St. Paul, Minn. 98 TJX U.S. Specialty Framingham, Mass. 41
Gap San Francisco 2 Too Inc. New Albany, Ohio 95
General Nutrition Centers Pittsburgh 54 Toys “R” Us Wayne, N.J. 6
Genesco Nashville 68 TransWorld Entertainment Albany, N.Y. 57
Goody’s Family Clothing Knoxville, Tenn. 62 Tuesday Morning Dallas 75
Guitar Center Westlake Village, Calif. 51 Tweeter Home Ent. Canton, Mass. 86
Gymboree San Francisco 100 Ultimate Electronics Thornton, Colo. 96
H.H. Gregg Indianapolis 80 Urban Outfitters Philadelphia 78
Haverty Furniture Atlanta 82 West Marine Watsonville, Calif. 94
Hobby Lobby Oklahoma City 60 Williams-Sonoma San Francisco 23
Hollywood Entertainment Portland, Ore. 44 Zale Dallas 30
WWW.STORES.ORG STORES AUGUST 2005 S19

20. impulse
commitment
Know More. At Alliance, we understand the story behind the sale. Our goal is to help retailers do the same.
We know that with increased insight you can turn casual shoppers into dedicated customers
committed to a long-term relationship with your brand. Our marketing-driven private label
Sell More. and co-brand credit programs, in combination with extensive database services, enable retailers
to gather and analyze critical data, and then effectively use that information to help drive sales.
For more information, call 1-866-323-0478 or visit www.AllianceDataSystems.com
Integrated card and marketing services for retailers.
Card Services Database Marketing Loyalty Programs