Merry-Go-Round puts stores into 4 'concept' groups


Hoping to bolster its sagging sales, Merry-Go-Round Enterprises has launched an effort to more clearly distinguish the differences among its 1,400 stores by dividing them into four main "operating concepts," according to a report filed with the Securities and Exchange Commission yesterday.

The Joppa-based clothing chain, which has been in Chapter 11 bankruptcy proceedings since Jan. 11, has long been criticized for having a sameness in its stores despite selling under a myriad of names, including Merry-Go-Round, Attivo, Chess King, Cignal, Dejaiz, Silverman's, Boogie's Diner and Toofers.

Sales at the company's stores that have been open at least a year have been declining since December 1992. In March, such sales dropped by 21 percent.

Under the plan outlined in the company's annual 10K filing, various stores will be aimed at markets ranging from teen-age boys and girls to young men in their 20s and 30s.

"That's not a bad thing," said Peter A. Chapman, president of Bankruptcy Creditors' Service Inc. of Princeton, N.J., which publishes a weekly newsletter on the Merry-Go-Round bankruptcy proceedings. "It sounds like they are on the right track."

Company officials were not available for comment.

The plan calls for four major "concepts":

* The Merry-Go-Round concept -- Encompassing 517 stores, this category would include Merry-Go-Round and N-E-T Works stores, which average about 3,100 square feet in size. They will offer moderate- to higher-priced fashion apparel for men and women between 15 and 25 years old.

* The Dejaiz/Attivo concept -- 395 stores, called Dejaiz, DJ's, Fashion Center for Men and Attivo, will be aimed at men from 18 to 35. The average size of the stores is 2,700 square feet.

* Chess King concept -- This chain, which was bought by the company last year, will sell moderately priced clothing for men from 18 to 30. The 417 stores in this division have an average size of 1,900 square feet.

* Cignal concept -- These 80 stores, trading under the Cignal name, will target men and women in their 20s and 30s who are looking for "high-quality contemporary designer sportswear," according to the company's filing. These stores average 2,100 square feet in size.

The plan also includes two smaller divisions -- 20 Club International stores that offer tailored clothes for men from 20 to 50 years old and five Boogie's Diners, contemporary fashion boutiques combined with a 1950s-style diner.

Mr. Chapman said the plan appears to distinguish the stores enough so that they are not competing against each other. But he questions selling moderately priced clothes in Chess King, the smallest stores of the chain. "You're trying to do something in too small a store," he said, noting that smaller stores generally sell more expensive items because their rental rates are higher. "The lower the square footage, the higher the price."

"It looks like Chess King got the concept that was left over," Mr. Chapman said.

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