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Challenges, problems, and triumphs -- from a manufacturer's perspective.

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Changes at A.C. Moore

They may not be what they seem.

by CLN Subscriber & Mike Hartnett (February 25, 2008)

CLN received the following note from an A.C. Moore vendor:

I am curious, have you visited an A.C. Moore store lately? I did get a chance to visit a store a couple of weeks back and all I can say is ... how sad. How sad to see the state of affairs at the store I visited. All the way from the sad state of the assortment in each category to the sad state

of presentation, apparent poor in-stocks, empty shelves and the worst part of it all, in the entire time I was in the store (about 20 minutes) not one employee was available to help or, for that matter, to be seen.

It's a far cry from the time when you couldn't turn around the corner or down an aisle and you would see an employee asking you questions and offering to help you. Amazing how the store has changed from the days of not seeing an empty peg hook to the current state where half the aisle is empty or a majority of the aisle is full of two sku's!

Most of all I am shocked. Shocked at how fast the jewel of craft DIY retailers could reach this level! Scary really!

I wonder if you have any insight into this current state of affairs at ACMR?

Mike's Answer.

Apparently there is a different philosophy at A.C. Moore. Jack Parker, the founder and now-retired CEO was adamant about empty peg hooks. So the shelves were always full, but that's expensive to maintain such a high level of inventory.

Recent quarterly reports have revealed the new philosophy. Sales are down a bit, due in part because of ome peg hooks being empty, but profits are up because the new level of inventory isn't as expensive.

This situation is probably only temporary. A.C. Moore is investing in perpetual inventory/auto replenishment systems similar to what Michael Rouleau did at Michaels. It's a short-term investment that can result in long-term gains. As Wedbush Morgan Securities said recently in a note to clients, "... we continue to believe the company is making the right investments for the long-term, which may result in ongoing near term sales pressures yet increased profitability."

As long as A.C. Moore doesn't frustrate customers too badly before the new systems are in place, the company should be all right.

(Note: Agree with Mike and/or the vendor? Disagree? Email your thoughts to mike@clnonline.com. To read previous "Vinny" entries, click on the titles in the right-hand column.)

xxx

 

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