Ross plans to open 100 stores this year
Ross Stores plans to open 100 new locations — 75 Ross Dress for Less banners and 25 dd's Discounts — this year, the company said on Monday.
In February and March, the company made a good dent in its plans, opening 23 Ross Dress for Less (or "Ross") stores and and six dd's Discounts stores across 14 different states, according to a company press release.
Last week the company reported Q4 total sales grew 16% year over year to $4.1 billion and same-store sales rose 5%, on top of a 4% increase in the prior year.
Ross announced this major brick-and-mortar expansion at a time when several other retailers are going in decidedly a different direction. Last week, for example, Abercrombie & Fitch said it would shutter 60 stores this year and American Eagle said it plans to continue a focus on "right-sizing" its fleet.
Those apparel retailers are also seeing sales shift online, which is helping erode their margins. Ross, by contrast, last week said its Q4 operating margin grew 95 basis points to 14.6%, up from 13.6% in the prior year. For the 2017 fiscal year, operating margin increased 50 basis points to a record 14.5%.
The off-price retailer's announcement has actually become something of an annual event, according to retail analyst Nick Egelanian, president of retail development consultants SiteWorks International. "Ross has been growing at a rate of [around 100 stores per year] for several years now, and like Ulta Beauty, Sephora and all five TJX brands, we expect this trend to continue until these industry giants have consumed most of what is left of the remaining ... annual department store industry sales," he told Retail Dive in an email.
Those retailers are all operating in what essentially are — or used to be — department stores' thriving departments, he also said. "Department store sales have been dropping for decades, and Ross and the other discount retailers in their 'space' smell blood," he said. "With 30% of apparel sales already occurring online and apparel sales growing at only 3% annually, this is the only explanation for the continued growth we are seeing in Ross and other apparel, housewares and cosmetics retailers."
It also spells more trouble for lower-end malls, Egelanian warned. "We believe this will result in a complete collapse of the the B and C mall industry over the next 5 to 7 years," he added. "Only when that process is complete will their growth slow also."
In a statement on Monday, Jim Fassio, Ross President and chief development officer, said the company can grow to 2,000 locations from its current fleet of about 1,650 stores.
- press release via PR Newswire Ross Stores To Open 100 New Locations In 2018
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