COMPARISON OF STORE OPERATIONS

 
 
 
 
 
 

  
Claire Dillow, Lindsay Schutter, Lacey Jensen,
Vanessa Segura & Heidi Specht
October 28th, 2010
Store Operations
 Midterm Paper
As a whole, the companies interviewed took a strong stance of efficiency and
of ensuring that their stores reached their highest earning potential. The policies
discussed are developed and enforced to ensure absolute guest satisfaction and
profitability. The companies interviewed were: Club Monaco, DSW, Zara, Romy and Sur
la Table. The following pages will give a brief company overview for each company
interviewed.
 
DSW opened its first store in July 1991 in Dublin, Ohio. In 1998,Value
City Department Stores, Inc. purchased DSW. In December 2004, Retail Ventures,
Inc. consolidated several brands. Until July 5, 2005, DSW operated as a wholly
owned subsidiary of Retail Ventures, Inc. who continues to hold 60% of the outstanding
shares of DSW.  Months prior to the Initial Public Offering, DSW changed its name from
Shonac Corporation to DSW Inc, which stands for Designer Shoe Warehouse.Today,
DSW operates 300 stores in 37 states.

In 2006, the IT departments from Retail Ventures Inc. and DSW Inc. were split
off into a separate LLC called Brand Technology Services LLC (BTS). In early 2008
DSW launched its e-commerce website www.dsw.com.

A Passion For Shoes, DSW is the shoe shopping destination for style-conscious
women and men who appreciate value. With thousands of shoes, great prices, and an
ever-changing inventory, the brand captures the imagination of shoe lovers nationwide.
Encouraged by the award winning loyalty program DSW Rewards, these passionate
shoppers return time and again to a treasure-filled environment they call “addictive.”

Club Monaco is a dynamic, international retail concept that designs,

manufactures and markets its own Club Monaco clothing, accessories and home
collection. Each season, Club Monaco offers men’s and women’s updated classics and
key fashion pieces that are the foundation of the modern wardrobe. Products range from
clothing and accessories to eyewear, watches, sunglasses, and cosmetics for men and
women. The brand’s signature clean and modern style gives classics an update through
great design and current sensibility. Club Monaco is the lifestyle destination for today’s
urban professional.           The company was founded in 1985 and is based in Toronto,
Canada. As of May 5, 1999, Club Monaco Corporation operates as a subsidiary of Polo
Ralph Lauren Corp.Currently Club Monaco operates 66 stores throughout North America
and has recently opened stores in Hong Kong Seoul, Korea and Dubai.
Zara is owned by Inditex. Inditex is a global specialty retailer that designs,
manufactures, and sells apparel, footwear, and accessories for women, men and children
through its chains around the world.  Zara is the largest and most internationalized of the
six retailers that Inditex owns:  (Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius,
and Oysho).  By the end of 2001, Zara operated 507 stores around the world, including
Spain.
Zara was able to make major investments in manufacturing, logistics, and IT,
including establishment of a just-in-time manufacturing system and a 130,000 square
meter warehouse close to its corporate headquarters.  Zara manufactured its most fashion-
sensitive products internally and its designers continuously tracked customer preferences
and placed orders with internal and external suppliers based on this information.  Due to
its unique needs, Zara chose to internally develop its business systems.  Zara is now able
to originate a design and have finished goods in stores within weeks for entirely new
designs and take even less time for modifications of existing products. 
The first Sur La Table store opened in Seattle's Pike Place Market in 1972 selling
hard-to-find kitchenware imported from France. Since then the company has expanded to
more than 75 stores nationwide, a direct-mail business distributing millions of catalogs
each year, an e-commerce site, a gift registry, and a cooking class program. Sur La Table
continues to carry many of the same products from France that it carried when it opened,
but now offers tools from around the world to prepare any cuisine. Sur La Table remains
committed to its roots by continuing to provide exceptional customer service and a broad
assortment of premium-quality products. Sur La Table headquarters are located in
Seattle, Washington.
Mission Statement: “We are the culinary destination for artful entertaining and
cooking. Three decades of dedication to the culinary legacy.”
Romy started in 2005 with owner Michael Witz naming the individual store
after his daughter. Originally from South Africa his extensive retail background includes
helping a large retailer called "mr Price" grow from 30 stores to over 300. Working with
his partner Danny Chu they've grown the company to now include over 19 stores through
Washington, Oregon and Arizona. The idea of Romy was to have a lower price point
store with styles similar to those of anthropologie and other romantic like style stores.
The thing that sets Romy apart from other stores is the asian and European influenced
pieces and a more personal store experience. Boutique like styles and service without the
prices.
Motto: “Luxury for Less”
 
            The following sections summarizes the various answers received from interviews.
As many answers were similar, they were compared. If any answers varied, they were
highlighted and contrated with the other companies.
 
Hiring, Training, and Dismissal techniques
 
            Hiring for all five companies starts at the bottom, with entry level positions. No
experience is necessary to be a sales associate in any company, but strong customer
service skills and passion for the products are the things sought after most frequently.
Zara also requires flexibility for their associates due to their variability in products and
fast fashion mentality. Romy invites all potential employees to fill out applications online
with an area for inputting their resume, but like all of the other businesses accepts paper
applications and resumes. When foot traffic for applicants is slow in the store, ads are
placed in local papers for Sur la Table, craigslist.com for Romy, and via the website for
Zara. Interviews for sales associates are conducted for all stores by managers: assistant or
general. Romy starts with a phone interview and follows up with a one-on-one meeting,
while Zara hosts two in person interviews with a offer for employment made after the
second interview conducted by the store general manager. 
            Training for all stores is increasingly structured and clear goals are placed for
each employee. Basic customer service skills are also taught to new employees if the
skills are not already possessed, but it is assumed that each individual understands the
basics of handling customer interactions. DSW focuses on three main parts to their two
week training process: stock on the floor, back stock, and register training. Sur la Table
has rigid employee evaluations at 30, 60, and 90 days to make sure the goals discussed in
training area are reached by those time frames. Zara creates an environment that is
welcoming and straight forward for each new trainee. They genuinely want daily duties
and responsibilities to be clear and concise with variations to be handed down by
management. Each training shift at Zara starts and ends with a review and re-group
session to maintain unambiguous standards.
            Dismissal procedures are consistent across all five companies, with
documentation of past infractions posted in the employee’s file as write-ups. These write-
ups provide accurate documentation or proof of inappropriate behavior. Sur la Table
upholds a three strike policy, three negative evaluations or write ups results in immediate
termination. Evaluations are the opportunities for having tough or uncomfortable
conversations with employees about their performance, in order to choose one of two
paths: the right track or dismissal. Zara finds termination to be rare inside the company,
due to the positive work environment. Club Monaco evaluates employees and uses
scheduling to reflect their performance. If an employee is performing sub-par then their
hours are cut until improvement is seen, the individual quits, or is terminated.

Inventory and Loss Prevention Procedures

            Physical inventory counting is conducted at least yearly for every business. Zara
has a high inventory turnover in each store; therefore inventory is taken every three
months, in essence quarterly. Romy and DSW take inventory twice a year where
shrinkage figures are computed. Sur la Table uses an outside agency to count physical
inventory once a year, due to a slower inventory turnover rate of 2.5 times a year. DSW
uses a computer system to keep track of inventory levels in stores across the country,
with physical counts done twice yearly. Club Monaco takes inventory figures and
calculates shrinkage into a percentages as well as dollars lost per day in order to look at
their loss in real time to assess solutions.
            Loss prevention is handled differently for each business. Sur la Table has a wide
price point for their products and finds that theft is not an issue from external sources, but
rather has had a significant issue with internal theft. They therefore have learned from
past incidences and has a strict zero tolerance policy for theft by employees of any kind.
As a company, shrinkage rates are relatively low, and take a stance of not offending their
customers by having security guards and realize that theft is just part of the business.
Zara’s clothing has a relatively low price point and they, like DSW, use their employees
as the first line of defense against external theft. DSW finds that having active sales
associates located for visible safeguards is their best line of defense to ward of potential
loss.

Store Maintenance Policies

            Light janitorial services are executed by sales staff daily to ensure the cleanliness
and appearance of all of the stores. These duties include garbage maintenance, dusting,
sweeping and vacuuming, window cleaning, bathroom sanitation, and overall
organization and stocking of the products. DSW, Club Monaco, Romy, and Zara all have
corporate liaisons that will help with any larger issues of building maintenance like
construction, repairs, and emergencies. Sur la Table relies mainly on an outside janitorial
staff to ensure the cleanliness of the store, not their direct sales associates. In turn, their
associates are required to maintain all working displays as to not compromise their
effectiveness. It is the job of the manager on duty, for all businesses, to check the
execution of all the in store cleaning policies.

Crisis Management

            First and foremost, DSW and Club Monaco had no plan for dealing with the
unknowns of a business. Zara has a unique stance on crisis management, because of their
vertical integration, and their lack of using a wide variety of external sources for product,
they are able to maneuver ways around any crisis they have seen so far. They produce the
majority of their products themselves, and the business is almost seen as a service
industry because of the way they are structured. There is no rigid corporate structure
explaining what products need to be stocked, so there is great flexibility in the way they
are allowed to merchandise their items, is essence giving them paths to avoid shipping,
manufacturing, or unforeseen crises. Romy, as a company, understands that there are
times where problems are out of their control. They train their employees on reaction,
versus prevention, of crises, and how to remain calm and rational. Sur la Table has
developed strong relationships with vendors and manufacturers, to be able to negotiate
ways around shipping errors, or defects with merchandise. They also invest in insurance
to help with shipping damage or lost items.

Daily Duties

            Because of the variety of the job titles of each person interviewed, their daily
duties have obvious differences. The store managers of Zara, Sur la Table, and DSW, are
responsible for sales associate time management, overall customer satisfaction, execution
of visual merchandise orders, stocking levels, theft, cash tracking and totaling, and
interactions with district and regional managers. Club Monaco’s district manager works
directly with their store managers to obtain status reports of all locations. It is their job to
discuss weaknesses, strengths, and responsibilities inside each store to improve
profitability. Romy’s operations and human resource manager wears many hats inside the
company and their daily duties are often markedly different from day to day. Overall in
any given day, they may deal with numbers driven conference calls with area managers,
marketing promotions, visual merchandising, store visits, updating policies and
procedures, training, but always copious amounts of paperwork.

Employee Scheduling

            Employee scheduling for all stores is done at the retail level. These duties are
carried out by the store or assistant managers and are executed with the input of last
year’s sales levels, holiday or promotion consideration, strengths and weakness of each
employee, as well as budget and profitability of the store as a whole. Individual employee
needs are taken into consideration, but are not the ending factor for deciding staffing
levels.
Supply Chain Management

            All of the stores, except Zara, have a traditional supply chain for their goods.
Corporate planners and merchandisers direct the season’s image to the buyers. Buyers,
determine the product depth and breadth for the stores, including working with
manufacturers, traditionally overseas, and vendors for shipping. Store and regional
managers keep track of the product placement and selling rates to help plan for the
amounts of product needed inside each location. Merchandise is then ordered, and
manufactured, traditionally from international sources and shipped either directly to the
store or to a warehouse for distribution. Zara has a unique supply chain, not traditionally
seen in retail markets. Unlike their competitors, Zara starts with in house designers that
create the vision of the next product of the company, from there they work with their own
manufacturers, either in house or contracted, to produce their own goods traditionally in
Italy. From there, lead times are extremely low, and products are shipped directly to their
international stores or to a warehouse for their United States stores awaiting quick
distribution.
 

WORKS CITED

http://www.surlatable.com

http://www.clubmonaco.com

http://dsw.com

http://romystyle.com

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