Specialty Chains Hone Concepts To Defend Market Turf.

The nation’s top specialty stores are striving to strengthen their grip on hard-fought market niches to compete against a growing threat from mass merchants. The Triversity Top 100 Specialty Stores ranking, based on an annual survey and published this month in STORES magazine, highlights the diverse strategies these retailers employ to strengthen their position in the specialty market.

“Although specialty stores may experience a greater degree of volatility than mass merchants, they frequently are able to react more quickly to trends,” said Rick Gallagher, STORES Publisher and Vice President. “However, when mass merchants start paying attention to a merchandise category, specialty stores have to get even better at what they do in order to compete.”

Specialty stores are more popular that ever as shopping destinations, and the Triversity Top 100 Specialty Stores ranking offers no shortage of examples of companies that are thriving in category niches that provide plenty of opportunity for growth. The landscape this year is also distinguished by the size of today’s chains – 62 of the companies on this list (the most ever) registered annual sales in excess of $1 billion. Overall, the Triversity Top 100 Specialty Stores generated a combined $238.4 billion in sales in 2000, a gain of 11 percent over 1999.

The Top 10 specialty stores remained intact this year, but were jostled under intense competition within many of the same specialty segments. Minneapolis-based Best Buy unseated fellow consumer electronics retailer Circuit City to attain the #1 spot this year with annual sales of $15.3 billion in 2000, a 22.7 percent increase over 1999. This ‘big box’ specialty store chain is the largest in the country and has plans to stay that way – Best Buy increased their stores by 387.7 percent over 1999. Circuit City Group fell to #3 following their decision to exit the major appliance business, and CompUSA held on to their #9 spot.

Apparel sellers represent the largest group of specialty retailers on the chart. Gap jumped two places to become the biggest of them all at #2, with annual sales of $13.7 billion in 2000. Not far behind are the Limited at #7 and TJX at #8, parent of off-pricers T.J. Maxx and Marshalls. Toys ‘R’ Us dropped to #5 this year and is one of only two remaining toy sellers on the Top 100 list. And despite recent retrenchment due to small businesses reining in spending, office supply superstores Office Depot (#4), Staples (#6) and OfficeMax (#10) were still able to generate enough sales to make the list.

Home goods specialty stores are also feeling the impact of competition from mass merchants, with a few forced to declare bankruptcy this year. However, #48 Pier 1 Imports is not letting either competition or the economy slow it down. It is actively looking for acquisitions after purchasing the 21-store Cargo Furniture chain from Tandycrafts and plans to open 75 to 85 new stores this year, up from 65 in 2000.

“The Triversity Top 100 Specialty Stores list remains the benchmark for this segment of the retail industry,” said Greg Bandler, Vice President, Corporate Marketing for Triversity Inc. “We are pleased to once again partner with STORES to provide this definitive ranking and help identify emerging trends in a very competitive market.”

The full Triversity Top 100 Specialty Store ranking, with analysis, can be found on the STORES magazine web site at http://www.stores.org.