It was a matter of too much at once, says Alan Rosskamm, president and CEO of fabric and craft retailer Jo-Ann Stores Inc.
From 1998 to 2001, Rosskamm opened 70 superstores, implemented a $33 million retail inventory control system by German conglomerate SAP AG and opened the chain’s second distribution center, in Visalia, Calif.
The three major initiatives required a major investment and left the company with $245 million in debt by 2001. Profits were down 153 percent from the previous year and its stock was trading at less than half its value from the previous year.
In March 2001, Rosskamm laid out a three-year goal for the company’s turnaround. Two years later, it appears as if he is nearing the finish line. Logistics are running smoothly, debt has been reduced by $180 million, 148 underperforming stores have been closed and more than $50 million of the least productive inventory was eliminated, all of which freed up more than $80 million in cash.
“It really became a matter of editing and getting down to core,” Rosskamm says. “Editing out the redundant product and the nonproductive products, editing out the nonproductive stores.”
With most of the “editing” completed, Rosskamm has turned his sights on Jo-Ann Stores’ next growth phase, with 35,000-square-foot big box stores located in class A retail locations.
The larger stores, more than twice the size of Jo-Ann’s traditional 14,000-square-foot stores, generate $50 more of sales per square foot than traditional stores in the first year, and mature with $60 to $70 more in sales per square foot.
“As we look toward the future, we’re not wasting time patting ourselves on the back,” Rosskamm says. “We’re very proud of what we did, but all the things we have apparently done right in the past two years have been helped and made a lot easier by the fact that our industry has been much in favor with the nation’s consumers.” How to reach: Jo-Ann Stores Inc., (330) 656-2000 or www.joann.com
