Anna's Linens: A Store with Value
By David Gill
One of the most notable items about New York Home Fashions Market is the number of vendor executives who tell showroom visitors, "Anna's Linens saw this and loved it."
The evident pleasure with which vendors deliver this testimonial is an important element of the high regard the industry has for Anna's Linens. Alan Gladstone, chairman, president, chief executive officer and founder of the specialty retailer, said one of his goals in creating the chain was to provide "a store that all customers would be proud to shop at."
December 2012 will be the 25th anniversary of Anna's Linens, which Gladstone named for his mother. "I started Anna's with one store and a dream to grow the business to 100 stores," he said. "We now have 285 locations and a dream to grow the business to 1,000 stores."
The business has also grown into its third generation, in a way. Scott Gladstone, Alan's son, is chief operating officer. "The vendor community recognizes that Anna's fills a space in the market that's underserved--the value-oriented, budget-moderate customer," Scott Gladstone said.
Leading up to Anna's founding, Alan Gladstone worked for several retailers in home furnishings, including The White Front, a general-merchandise store, and specialty retailers Three D Bed & Bath and The Home Front, a division of U.S. Shoe. When a California discount retailer called Zodys, which catered to budget-moderate consumers, closed its doors in the 1980s, Gladstone saw an opportunity for a home specialist that served this particular demographic.
The first Anna's opened in Baldwin Park, Calif. "Alan took a steady and methodical approach to growth," Scott Gladstone said. "He always stayed disciplined around who our core customer is, and we have not differentiated from that."
Describing the target demographic and what this shopper looks for in home furnishings, Scott Gladstone said, "This customer is aspirational by nature. She doesn't want cheap merchandise. She places a value on quality and fashion and the assortment inside the store."
The un-cheap merchandise in Anna's is centered around soft home goods. "We are focused on being the leader in decorative window coverings and fashion bedding," Scott Gladstone said. "Sheets and towels are also critical to our assortment, along with bath accessories. We are continuing to extend our merchandise mix to include home-decor items such as framed art." Housewares, tabletop products and mattresses are also part of the assortment.
He added that Anna's conducts tests of its entire assortment for sell-through, velocity and seasonality. The Anna's shopper "wants to know that our products and assortment have some longevity in terms of the fashion element, and in terms of our commitment to keeping that assortment in the store for a period of time," he said.
In Gladstone's view, Anna's has differentiated itself from other specialty retailers "by continuing to be focused on compelling value propositions inside the store, in our discipline on sourcing and in passing those values on to our customers. We believe that a high customer-service model like ours creates a binding experience as she looks for assistance in decorating her home." Anna's conducts what Gladstone described as an "intense" training program for its sales associates, which centers on customer service, customer engagement and product knowledge.
In February of this year, Anna's inaugurated a program to reward its loyal shoppers, called Anna's Fan Club. This program "recognizes our valuable customers and allows them to build upon our relationship with them. It provides a lot of benefits, sales events, customer recognition and newsletters via email," Gladstone said.
Anna's has also established a social-media presence, primarily on Facebook and Twitter. "Our traffic and volume of communication on these sites are growing in the high double digits," Gladstone said.
The average Anna's Linens measures 10,000 square feet, with some stores in the chain as small as 5,000 square feet and others as large as 18,000 square feet. "We will always continue to explore ways to refine the store model in terms of merchandise assortments and footprint," Gladstone said.
The company is projecting changes going forward beyond the tweaks being implemented in layout and visual merchandising. In July, Anna's opened a new, 400,000 square-foot distribution center in Fontana, Calif., which will enable the company to invest in new product categories and to reallocate space in its stores. Not only will the new DC support Anna's brick-and-mortar locations, but it will also serve as a fulfillment center for its e-commerce business.
Anna's is also expanding to meet Alan Gladstone's goal of 1,000 stores. "We are looking to expand our footprint in the Northeast and to backfill existing core markets where we have significant growth opportunities," Scott Gladstone said. "In 2012, we'll be entering Puerto Rico with several new stores. We also believe there are opportunities for us in the Southeast to expand our footprint. Canada and Mexico are possibilities, too."
Eventually, Gladstone said, Anna's could vault over that 1,000-store mark, but Gladstone didn't put a time frame on when the company could achieve this. "We will be very disciplined about our future growth," he said.
E-commerce will also expand as a part of Anna's operations. "We've made some significant investments from the technology and human standpoint" in this segment, Gladstone said. "Right now, it's a relatively small percentage of our overall business, but it's growing rapidly and we recognize the value that will play in creating a true omnichannel approach to serving our customers."
Clearly, there will be changes in Anna's as it looks to grow down the road, but one aspect of the business will always remain the same, according to Gladstone: "We will continue to tailor our merchandise mix and product assortment to be the most relevant retailer for value-priced home fashions."