DRESSING UP THE CENTER STORE 2004-05-31 (2)

Dan Alaimo

NEW YORK -- Fashion industry veteran Jack Mulqueen has designs on the supermarket industry.

If Mulqueen's plans come together, tests of 1,000-square-foot leased-space clothing shops located up front in center store territory will be under way in select supermarkets this fall.

"We have several very interested retailers who are prepared to move forward with the test modules," said Mulqueen, who is chief executive officer of JAM Global Trading Co. here. "Our plan is to do eight test modules per company, on floor Nov. 1. The rollout, pending the success of the test modules, would happen in February."

Targeting chains among the industry's top 20 supermarket companies, as well as some select independents, Mulqueen expects to have 24 stores installed and doing $15 million in sales in the first year, and 1,600 stores up and running within three years with revenues of $1 billion. He is going after "A-line" stores with customers "from the top end to the middle of the market," he said.

The reason for Mulqueen going after supermarkets is simple. Those 20 companies have 17,000 doors, $300 billion in sales, and 20 million people shopping in their stores daily. "We want to take the merchandise where the traffic is," he said.

Supermarkets need to consider Mulqueen's proposition for an equally simple reason, he said: Wal-Mart. As Wal-Mart moves from a 16% market share of the food business to perhaps double that in a few years, "it's really survival," he said.

"We see the new channel being the grocery merchants, and God knows the grocery merchants need this more than ever. They are scratching their heads trying to figure out how to diversify their general merchandise, and they haven't come up with a solution yet," Mulqueen said.

"We believe this is the solution," he said.

Ironically, it is Wal-Mart's United Kingdom operation, Asda, that has been the inspiration for Mulqueen's project. Asda started with a small line of clothing "in the corner," and now has departments that range from 5,000 to 15,000 square feet, carrying a full line of clothing for the family as well as home accessories. Asda now refers to itself as a "food and apparel supercenter," while its George line is the second most popular in the U.K., and is being sold internationally, Mulqueen pointed out.

"Our point of view is to get to where Asda is. We are really at the beginning of something that is going to unfold over the next five years in the grocery store arena," he said.

The program will carry the "Jack Mulqueen" brand, which is being phased out of department stores and other traditional clothing venues, he said. "We are repositioning the distribution channel," he said.

The shops will be of modular construction that can be assembled in eight hours -- "essentially overnight," Mulqueen said. With an open design that will allow shoppers to flow in from other parts of the store, "it takes on the look of a hard shop, yet it is an assembled modular shop," he said.

The first one will be assembled in Mulqueen's showroom within the next 30 days, he said. The departments can be expanded with additional 1,000-square-foot modules, he added.

Because the shops will be located in the center store area of stores, in space now given to "redundant" grocery items, they will serve to boost traffic in that part of the store, he said. They will also increase net profits to an estimated $60 per square foot.

The shops will be staffed by Mulqueen employees for all the hours a store is open, even if it is a 24-hour operation, he said. However, customers will pay for the merchandise at the front checkouts.

Hearing about Mulqueen's program for the first time, Jeff Manning, managing partner, F&M Merchant Group, Lewisville, Texas, said, "I think that can work." The challenge most supermarkets have faced in apparel is making the selection look new to the frequent food shopper. "If he's got leased space -- and it's his space and they can't kick him out -- if he's got his own people and can change that merchandise and keep it fresh, I think he could have a home run, because the lady is looking for something to bring some fun and excitement to that grocery shopping experience," he said.

Mulqueen plans four collections a year with monthly deliveries, "so every third or fourth week a whole new floor set would happen," he said. Selections will be standardized, except that different, lighter-weight merchandise will be sold in the Sun Belt, he said.

Initially, only women's products will be sold, with later expansions into children's, men's and then home accessories, he said. The quality will be at the level of Banana Republic or Talbot's with pricing in line with Target, he said. For example, knit separates would sell from $9.99 to $14.99, sweaters would be $14.99 to $19.99, pants and skirts would be $19.99 to $29.99, and jackets would be $39.99 to $59.99.

Merchandise will be shipped directly to stores from overseas suppliers to avoid wholesale margins, Mulqueen said.

He is going after suppliers with the logistical capabilities of servicing a large number of stores with "virtually an overnight type of delivery. It's a quick response kind of concept in terms of fulfillment," he said.

Just the Right Size

NEW YORK -- Finding a garment that fits will be greatly simplified by new body scanning technology being planned for supermarket apparel departments.

When installed this fall, it will be the first time this kind of system will be used anywhere, said Jack Mulqueen, chief executive officer, JAM Global Trading Co. here.

"This is a software system with three camera heads that are placed in the fitting room. The customer can step into this and in 20 seconds it will give her a card with her height, weight and all other critical measurements computed to our sizing," he said.

Mulqueen will use a different sizing system than elsewhere, with sizes ranging from 1 to 6. This is partly psychological, with the lower numbers seeming more flattering, but also avoiding the variances of other manufacturers' apparel.

The device will be activated with the customer's loyalty card, which in turn will link Mulqueen's operation with the retailer's customer information. "So it becomes a database for cross marketing for the retailer or other suppliers of the supermarket," he said.