West marine opens

Should individual West Marine Inc. stores get bigger or smaller?
The aftermarket accessories retailer wants to have it both ways. It opened a new “Superstore” in Fort Lauderdale during June, and it plans to open a total of 15 smaller “Express” stores this year.
The 28,000-square-foot Fort Lauderdale Superstore is West Marine’s second. Its first Superstore, a 30,000-square-foot facility, opened last year in Marina Del Ray, Calif., near Los Angeles, and another Superstore will be opened near San Diego early next year.
The Marina Del Ray store actually is “a slightly different concept because we were forced to utilize two locations 200 yards apart and differentiate them through product offerings,” said John Edmondson, chief executive officer.
Both the Fort Lauderdale Superstore, and the planned San Diego Superstore, were traditional 7,000- to 8,000-square-foot West Marine stores that were expanded into the larger format retail operations, Edmondson added.
Meanwhile, Express stores occupy around 2,500 square feet of leased space near marinas. The first Express stores opened during 2002 at Mission Bay in San Diego and Monterey, Calif., and there were eight Express store locations operating as of this summer, said Rich Everett, the Watsonville, Calif.-based company’s chief operating officer.
More Express store openings are planned for 2004, although the number had not been determined as of this summer, he added.
As of July, West Marine operated a total of 334 stores, including the eight Express stores, the two Superstores and 62 BoatU.S. locations.
West Marine bought 62 BoatU.S. stores in January. BoatU.S. store range from 8,000 to 10,000 square feet, slightly larger than traditional West Marine locations, Everett added.
Both the Superstore and Express store formats are experimental and are intended “to facilitate deeper market penetration,” West Marine reported in a Securities & Exchange Commission (SEC) document.
The Superstores inventory “a broader assortment of merchandise than that of a typical West Marine store,” while Express stores “stock a limited range of products, mostly high demand items, but are within one-day delivery service from a larger store or warehouse with a more extensive product range,” according to the company.
“Our Express stores are constantly experimenting with product lines and services,” Everett added. “Our Express stores carry a selected inventory based on the boaters’ needs in a particular marina. Once opened, we continue to ask our customers what they would like us to stock.”
The “real estate strategy” for West Marine Express stores “varies by market and location,” Everett added. “We try to create a win-win situation for our landlords, our neighboring tenants, including other business that revolve around boating, and most of all, our customers.”
The Superstore and Express store experiments are part of a broader effort by West Marine to expand its presence in the powerboat segment, which was exemplified by its acquisition of the 62 BoatU.S. stores, along with related wholesale and catalog operations, for $72 million.
“Historically, West Marine’s brand name has mainly been associated with sail boating while many boaters have perceived the Boat America’s tradename, BoatU.S., as synonymous with power boating,” West Marine executives wrote in an SEC document. “Therefore, initially, we will continue to operate all of the acquired stores under the BoatU.S. tradename to capitalize on the brand loyalty of Boat America (BoatU.S.) customers and to foster cross-selling and cross-marketing opportunities.”
West Marine planned to open a total of around 30 new stores this year, including the new Superstore, the 15 Express stores and “two or more stores in Canada.” The remainder will be “traditional West Marine stores in higher volume U.S. coastal markets,” the Nasdaq Stock Market-traded company reported in an SEC document.
West Marine executives informed investment analysts this summer that they believe their growth strategies will result in the company achieving between $650 million and $700 million in sales revenue this year, compared with $530 million in 2002, and that the firm’s net income will range from $21 million to $22 million in 2003, compared with $18.9 million earned last year.
— BY Jeff Kurowski