Gordmans: Filling the Retail “Voids”

Jeff Gordman is following in the family tradition. As president, chairman and CEO of Gordmans, he leads a company whose roots go back nearly 100 years, to when his grandfather opened a store in downtown Omaha in 1915.

From that one store, the company evolved over the years, eventually expanding beyond Nebraska. It also added a discount division, Half Price Stores. By 1990 the company had 32 stores, equally divided between the two divisions.

Gordman, 49, took the helm in 1996. A 1986 graduate of the Wharton School at the University of Pennsylvania, he initially went to work as a mergers and acquisitions analyst for a Wall Street investment bank. He returned to school and, in 1990, earned a graduate degree in management from the Sloan School at the Massachusetts Institute of Technology.

In 1990, Gordman returned to the family business, working in various departments. In 1996, he was named president and CEO, and would go on to lead the company through significant changes, including a sale to Sun Capital Partners in 2008, and a return to the public arena in 2010.

Under Gordman’s watch, the company has evolved into an everyday-low-price family department store chain that offers a wide assortment of brand-name goods in a modern and inviting environment. The retailer forecasts 2012 annual sales of between $617 million and $621 million.

Chain Store Age senior editor Katherine Field Boccaccio talked with Gordman about the company’s evolution and strategy going forward.

How has Gordmans evolved in recent years?

A reorganization in the mid-1990s gave us the opportunity to focus on just one concept rather than two. We decided that the business to keep would be the Half Price Stores, an off-price concept, and we shuttered the Richman Gordman mid-tier department store concept.

When I became CEO in 1996, we launched a repositioning strategy after determining that the Half Price Stores nameplate reflected only one dimension of our holistic selling proposition. We developed a new store prototype, overhauled our portfolio of name brands, created a new brand personality based on the themes of fun, unique and energetic, established some financial management disciplines, and finally we returned the integrity to our pricing message.

Tell us more about the pricing.

Somehow, along the way, we had moved away from an everyday value-pricing message and had become more promotional. To rectify that issue, we recalibrated our advertising strategy to leverage the differentiated and intrinsic value of our merchandise that we sell at our everyday prices. The capstone of the repositioning was changing the name of the concept from Half Price Stores to Gordmans. That addressed the issues associated with the Half Price Store name and was more in consonance with our selling proposition.

How are the company’s roots evident in today’s Gordmans?

My grandfather used to say, ‘To dream, to risk, to care, but the most important of all is tenacity of purpose.’ That philosophy pervades our DNA. Gordmans is a very mission-focused culture. Our mission, which is to delight our guests with big savings, big selection and fun, friendly associates, hopefully inspires our associates to make the world a better place by delivering unique value to our guests, which will then lead to improving the quality of their lives. That’s what we are trying to do, one guest, one store and one market at a time.

As a more concrete example, my grandfather was pretty entrepreneurial. He helped pioneer the idea of the racetrack-shopping configuration, making it easy to navigate a relatively big box. Some of our stores were as large as 100,000 sq. ft., so they needed an efficient layout. He may or may not have been the inventor of the configuration, but he was certainly one of the early adopters, the first perhaps of any scale. That idea is reflected in our current prototype, which has two racetracks to maximize our aisle real estate.

How does Gordmans fit into the current landscape?

Whether you’re talking about stores like Target or Kohl’s or J.C. Penney, which are all great retailers, we try to capitalize on voids in the market by leveraging selected destination and niche businesses that may be underserved. We also try to infuse our assortments with a greater preponderance of fashion vis-à-vis basics.

In addition, we try to ensure that our stores are visually appealing, well organized, infused with fun and entertainment, and staffed by associates who are dedicated to high service to set ourselves apart from other retailers who compete in the value segment of the industry. When we look across the retail landscape, we believe that while every given channel may compete well on one or even two dimensions of our selling proposition, which is about optimizing the savings, selection and shopping experience concurrently, it doesn’t appear that there are retailers that focus on all three elements.

We want to make sure that while an off-price retailer might be really good on price, they aren’t going to have the assortment that we would have, or a specialty store experience like we’re going to deliver or a higher-end store design like we are going to provide. That’s just one example. We are not really a department store, or an off-price store, or a discounter, but we strive to combine the best elements of all of those formats.

What are your expansion goals for the chain?

We have committed to expanding our geographic footprint in excess of 10% annually. We started 2012 with 74 stores, and have added nine, which equates to a 12% increase. Next year, we plan to open nine to 10 stores, and make several market debuts.

What is Gordmans’ average footprint?

Our prototype configuration is 50,000 sq. ft. However, because a portion of our new stores is retrofits of second-generation space, sometimes that size will fluctuate a bit.

Are you undertaking any new technology initiatives?

We leverage technology to help us execute our selling proposition. We just implemented a new Oracle ERP as part of a technology infrastructure to support our growth plans. And we’re expanding our distribution and logistics network with a second DC in Indianapolis that will open in 2014. We have a technology-based labor management system to efficiently align how we schedule associates with task- and service-based activities.

What is your leadership style?

My style is reflected in our culture. We are really passionate about delivering on a fun, fulfilling and engaging work experience for our associates. The bottom line is that if our associates aren’t psyched to be a part of Gordmans, then they can’t delight our guests.

Also, we recognize that our success is totally contingent on collaboratively leveraging the ideas and opinions of our associates throughout the organization. That speaks to my leadership style and hopefully our company culture.