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Container Store's Well-Organized Success : Marketing: Booming 13-outlet chain helps its customers by being the supermarket of storage containers and accessories.

March 28, 1995|LINDA LEAVELL | ASSOCIATED PRESS WRITER

DALLAS — If you're starting to attack closet conundrums, pantry problems, attic adversities and other organizational obstacles, it must be time for spring cleaning.

For many people, the hardest part may be finding places to store things. So a company that recognizes consumers' need for containers, bins and cabinets is likely to find a successful niche in the crowded retail market.

The Container Store, a 13-store chain based in Dallas, has turned into a super-store in home and office organization, much like Circuit City in the electronics business and Home Depot in home improvement.

"We want our customers to think of us any time they think of trying to put something away, trying to organize some space in their house, trying to create more space in their house . . . whatever the space is," chief executive officer Garrett Boone said in an interview recently.

Container Stores have thousands of products arranged in sections such as bath, kitchen, travel, home entertainment, office and recycling. The stores use open space and natural lighting and much of the merchandise comes in vivid colors.

Among the products are several varieties of plastic stacking baskets, fanciful wrapping paper and gift boxes, laundry and shoe bags, jars, colored boxes and wine racks. There are photograph organizers, file cabinets, makeup caddies, jewelry boxes and pencil cups.

"It's a terrific company. It's one of the finest retail companies in America," said Leonard Berry, director of the Texas A&M University Center for Retailing Studies. "I use them as a model retail company in my retail class at Texas A&M because of the lessons they teach us about having a clear vision of the business and executing that vision very well."

The company does have competition from Hold Everything and California Closet Co., two divisions of Williams Sonoma Group, as well as department stores, discount outlets and catalogues offering some of the same products.

But The Container's Store has an advantage from its size and broad selection, analysts said.

Consumers consistently have shown that they prefer the efficiency and savings that the large outlets can provide, said Dave Speights, editor of American Marketplace, a newsletter that addresses consumer trends and demographics.

The Container Store is fairly contained geographically. There are six locations in Dallas-Fort Worth, two in the Washington area and one each in Chicago, Atlanta, Austin, Houston and San Antonio.

The idea for The Container Store grew from one small store in Dallas 16 years ago into 13 locations and annual sales of $75 million.

Boone got into retailing by managing a Montgomery Ward paint department. He also worked for Atlanta-based Storehouse Inc., a furniture store, for four years, and then left to develop his dream of a handmade furniture store.

His two original partners were John Mullen, an architect friend, and Kip Tindell, who began working for him at Montgomery Ward as a high school student and then followed him to Storehouse.

Boone and Tindell, now the company's president, came up with the organization and storage concept after seeing Skandia wood shelving at a home improvement show. At that point, they decided to dump Boone's "happy woodworker" idea.

They started with a small collection, which included Skandia shelving and the Elfa modular organizing system that is the store's No. 1 seller.

The idea that began with a $35,000 investment (but no cash register for nine months because it was too expensive) took off within two months, Boone said.

"Within a year's time, we got all sorts of people who wanted to buy franchises and open up 100 stores the next year and all the things you get when people think you have something that works," he said.

Chicago and Los Angeles are getting the next two stores, and the company expects to open new stores at a pace of about two to four a year for the foreseeable future.

Despite their slow growth, the stores have the potential to crush smaller businesses, Speights said. "Just like Wal-Mart does in every little town it goes into. That's American retailing in the '90s," he said.

The Container Store's growth strategy is much like that of home furnishing retailer Crate & Barrel, which "could have many more" stores than it does, Berry said. "The focus is on doing it right--not just getting a bunch of stores out there," he said.

Boone agrees.

"Our philosophy is one great store location is worth three OK ones," he said. "So we want the great ones."

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