She doesn't like the stores because they have narrow aisles, long lines and "way too much stuff."
Corona, Calif., resident spent a recent lunch hour at a Ross in Santa Ana enthusiastically making her way along a rack of women's pants.
Latching onto a pair of Levi Strauss hip-hugging, boot-cut jeans, she was delighted to see they were marked down to $10.99 from $48. "How could that be? They look fantastic."
They didn't fit. No problem. "You've just got to keep digging," said Bullard, a 45-year-old shipping department worker. "And it's fun."
Behold the treasure hunt syndrome, as analysts call it, a willingness to swap the niceties of department stores for the thrill of finding a bargain. It is boosting the fortunes of so-called off-price retailers, such as Newark, Calif.-based Ross Stores Inc. and its chief competitor, TJX Cos., parent of the T.J. Maxx and Marshalls clothing chains.
TJX, based in Framingham, Mass., recently posted a 29 percent jump in quarterly profit. A consensus of analysts surveyed by Thomson First Call Inc. expects the retailer to post third-quarter earnings per share of 65 cents, up 14 percent from the year before.
The company has racked up nine years of sales and earnings growth and has set its sights on a nationwide expansion that ultimately could triple its stable of 573 Ross stores. The company's Baltimore-area outlets are in Catonsville, Columbia, Owings Mills, Parkville and Towson.
The hook for consumers: high-profile brands -- from Quiksilver and Tommy Hilfiger to Liz Claiborne and Perry Ellis -- at low-ball prices.
"They've got things that are practically free," said Anne Hinkey, a 59-year-old real estate broker from Huntington Beach, Calif., shopping in the Santa Ana store. "Any time I'm by a Ross Dress for Less, I just cruise through and see what I find."
Keeping in mind shoppers' seemingly insatiable demand for discounts, Ross next year will launch an even-lower-priced chain, dubbed dd's discounts, to target lower-income families in urban and suburban neighborhoods.
"We think this is an underserved market," Ross Chief Financial Officer John Call said, projecting that the initial launch of 10 stores in the West — most of them in California — eventually could expand to at least 500 nationwide. "From an apparel standpoint, we don't see anyone doing it well, particularly on the West Coast."
The average price of an item purchased at Ross is $10. At the new dd's discounts stores, the average price will be lower still, Call said. The new chain will have a similar mix of products as those offered in Ross stores, which include accessories and housewares. But instead of merchandise that might be found at Macy's or Robinsons-May, dd's discounts will carry brands more like those sold at Sears or JCPenney stores.
TJX launched a similar chain store four years ago and now has nearly 100 A.J. Wright stores, mostly on the East Coast -- including in the Westside Shopping Center in Baltimore, as well as in Dundalk, Glen Burnie and Woodlawn.
That division posted a 56 percent sales increase for the quarter ended Oct. 25. Sales at A.J. Wright stores open at least a year, a key industry indicator, rose a hearty 14 percent.
Although department stores have been struggling for years, and some specialty-store companies, such as San Francisco-based Gap Inc., are trimming square footage, Ross and TJX continue expanding at a combined rate of 10 percent to 12 percent, according to a report released this month by Brian Tunick, an analyst with J.P. Morgan.
In addition, both Ross and TJX are spending $200 million to $250 million a year to buy back stock and both are paying dividends to shareholders, the report said.
Shoppers' persistent quest for name-brand bargains, Tunick said, will allow the off-price chains to continue to swipe market share away from both specialty and department stores.
In the brutally competitive retail arena, off-price apparel retailers enjoy a variety of advantages. They usually locate away from malls, where rents are cheaper. In addition, they are less vulnerable to fashion demands, which helps to steady profits, analysts say.
These retailers gain an edge over mass merchants — such as Wal-Mart Stores Inc. and Target Corp. — by offering more well-known brands, which they sell at prices that range from 20% to 60% below a department or specialty store's regular price.
For example, a $43 Callaway golf shirt was $19.99 at Ross recently, and a Perry Ellis pullover sweater with a suggested retail price of $49.50 was marked $13.99. A pair of Levi Strauss Signature jeans, a brand that Levi introduced to Wal-Mart stores for about $23 a pair, were available at Ross for $12.99.
"Big-name brands at rock-, rock-bottom prices is a good formula," said Marshal Cohen, chief industry analyst for NPD Group, a market information company. "We're watching this evolution continue as the consumer continues to gravitate toward better fashion at lower prices."
To keep prices low, off-price retailers must make smart buys.
Ross says it has more than 200 buyers in the garment districts of Los Angeles and New York negotiating deals with about 4,000 vendors. In some cases, Ross buys goods after another retailer has canceled or cut back on an order.
Other times, Ross may snap up fall apparel after the season ends and then keep it in storage until the next fall approaches. As of the end of October, 38 percent of its total inventory was such "packaway" goods, finance chief Call said.
A learning curve
Ross, in some ways, is still in its adolescence.
It started in 1982, when a group of investors bought six small neighborhood department stores in the Bay Area and stocked them with merchandise marked well below regular retail prices. Hoping to become established along the West Coast in advance of an onslaught of TJ Maxx and Marshalls stores, Ross opened 140 stores in the first four years.
In 1985, the company went public. By 1992, revenue sailed past $1 billion.
But the process hasn't been painless.
In 1986, when an oil-related economic slump hit Texas and Oklahoma, Ross closed 25 underperforming stores there. It also struggled in the early 1990s as it tried to use buying strategies more suited to department stores, a plan that flopped.
Since then, the company has become much savvier about dealing with vendors, and upgraded its information technology systems, said Donald Trott, an analyst with Jefferies & Co.
"It's really a company that's gotten its act together in the last four years or so, and we think it's gaining increasing investor recognition," he said.
Today, Ross employs about 20,000 people in Maryland and 24 other states. Call predicts sales will be close to $4 billion this year. The company's shares have gained 24 percent so far this year.
The off-price sector of retail has its share of risks. Department stores have been slashing prices on brand-name merchandise so drastically in recent years that they've begun narrowing the gap between the various segments. And warehouse club stores, such as Costco Wholesale Corp., are gaining market share, partly by selling heavily marked-down items such as designer jeans, said Cohen, the NPD Group analyst.
Costco shoppers "can't even try them on anywhere, but they still buy them," he said. "And if it doesn't fit, they'll give them to a friend."
Such pressures can force off-price retailers to make further discounts, which can erode profit.
Indeed, consumers have become increasingly adept at switching gears in recent years, moving from department stores and specialty stores to discounters to warehouse clubs. Off-price stores often are just one stop along the path.
Ross' same-store sales reflect the struggle. Comparable-store sales were flat in the first nine months of this year, compared with a 9 percent increase in the same period in 2002. Spokeswoman Katie Loughnot attributes the wimpy numbers in part to a wet spring, the Iraq war, a weak economy and tough competition.
But the company is upbeat about its prospects and plans to be in every state eventually.
"Ultimately, for retailers it's about execution," Call said. "And we execute pretty well."
Analysts tend to agree.
"There's clearly been a paradigm shift," said David Mann, an analyst with Johnson Rice & Co. "Consumers now shop the off-price sector more consistently, more frequently. They go into the stores to browse that treasure hunt atmosphere."
Persistence pays off
Finding the "treasure," however, can take a heap of hunting.
Ross stores often have limited colors and sizes in a given style.
Also, the stores tend to get messier as the day wears on because customers are "in there sorting through everything," spokeswoman Loughnot said. They are "recovered" by the next shopping day, she added.
A women's lingerie rack at the Ross store in Santa Ana included a snuggly baby outfit and robes without belts. A T-shirt on the clearance aisle appeared to have been splattered with grease. Discarded clothing was slung over racks.
About 5 percent of the clothes Ross sells have slight imperfections, such as crooked stitching, but the company does not buy damaged goods, such as pants with a broken zipper, Loughnot said. Merchandise damaged after the purchase will end up on the clearance rack, she said.
Robbie Roth, shopping at the Santa Ana store recently with her 12-year-old son, Chris, said she had a little trouble warming to Ross, which is so different from the Nordstrom she used to patronize. "I used to hate this kind of store," said the 52-year-old escrow officer from Los Alamitos. "But now it's an adventure."