CAS~. 14 Hutch: L~cating a New Stor~ -: - . ~.. .:.

>:

, In June, after returning from a trip to the 'has attached price labels, UPC identifyin~
Bahamas, Dale Abell, vice president of codes, and source tags for security purposes '_
new business development for the Hutch and, placed apprDpi"iatemerchandise OD,'
Corporation, began a search fora good location hangers. Once at the distribution centers; tiil :~
1<) open a new store. After a preliminary search, merchandise is consolidated for reshipment •.. !i
Abell narrowed the choice to two locations, the stores. Some staple merchandise, such""" ~~
both in Georgia. He nDW faces the difficult hosiery, is stored at these distribution centeii ..';·
.'i.t?

task of thoroughly analyzing each location and All Hutch stores are located within 400 m,i1~ ,
determining which will be the site of the next of a distribution center. This way, as A~ :"
store. explains, "A truck driver can deliver to everj -
location in two days." '
:;..,...•

COMPANY BACKGROUND
The Hutch store chain was founded in 1952 by
John Henry Hutchison, amusician and extremely
successful insurance salesman. Hutchison
established the headquarters in Richmond,
Virginia, where both the executive offices and
one of two warehouse distribution centers are
located. Hutch currently operates 350 popularly
priced women's clothing stores throughout the
Southeast and Midwest. Manufacturers ship
all goods to these distributiDn centers. They .
HUTCH FASHIONS 'fr:~
·:ii~~
Hutch Fashions is considered one of the leadin4!I
popularly priced women's fashion appar ~
chains in the Southeast. The stores carry trendy "
apparel selections in juniors', misses', ancl"1B
women's sizes, aU-at popular prices. The chairl~S
offers a complementary array of accessories ih ..
addition to its main features of dresses, coats,
and sportswear. Located mainly in strip cente~ 4
and malls, these shops typically require 4,OO~L;~
 Cases 695

HUTCH EXTRA
IIIDtDI
Hutch Extra stores are primarily located in layout of Hutch Fashions* Hutch Extra Store
strip centers and malls. They bear a strong
j. resemblance to Hutch Fashions. The difference

~ 'is that Hutch Extra stores require less space

: (2,000-3,000 square feet) and cater to women
"requiring large and half-size apparel. (Women
..'who wear half-sizes require a larger size but are
..-not tall enough to wear a standard large size.
in other words, a size 18~ is the same as size
18 except that it is cut for a shorter woman.)

Hutch Hutch
Fashions Extra
;:HUTCH FASHIONS* HUTCH EXTRA
Although Hutch Fashions and Hutch Extra
-. ~tores selectively appear as separate entries,
~e corporate goal is to position both as a single
-entity. The combination store emerged in 1986
.'rmd is now used for all new stores. The Hutch
"y'ashions* Hutch Extra combination occupies
'~combined space of 6,000-7,000 square feet,
. ~ith separate entrances for each entity. A Product/Price
ial wall separates the two frontal areas of Hutch positions merchandise and price levels
e store but allows for a combined checkout! between the mass merchandisers and the
stomer service area in the rear. These stores department stores. You won't find any bluelight .
e primarily located in strip centers and can specials or designer boutiques in a Hutch store.
casionally be found in malls. (Exhibit 1 By avoiding direct competition for customers
'~ws a typical layout.) with the large discounters (Target, Walmart)
and the high-fashion department stores and
specialty shops, Hutch has secured a comfortable
ARKETING STRATEGY
J[-
niche for itself. "Our products must be priced
'. .ustomers . at a level where our customers perceive our
products to be elegant and fashionable but not
l~utCh'S target.market is women between the too expensive," notes Abell.
!~kesof 18 and 40 years who are in the lower-
; Ifiiddleto middle-income range. Abell explains,
'~e don't cater to any specific ethnic group, Location
:'hly to women who like to wear the latest Hutch stores are located throughout the
··hions." .Southeast and Midwest and must be within a
I' .
i 696 Retailing Management

I; 400-mile radius of a Hutch distribution center, . (see Exhibit 3). Dalton's 99 index means
Within this geographic !irea, Hutch stores are that the spending potential for women's
i located in communities with a population range clothing' is slightly lower than the national
of 10,000 to 50,000 and a trade area of 50,000 average of 100. Finally, Abell is using Claritasl
to 150,000. These locations are characterized UDS's PRIZM lifestyle reports. These reports
by a large concentration of people in the contain numeric figures and percentages on
low- to middle-income brackets who work in the population, households, families, sex, age,
agriculture and industry. household size, and ownership of housing. An
Hutch stores are primarily located in strip excerpt from the report is given in Exhibit 4.
malls or strip centers-generally ones anchored Some of the cluster group names are described
by either a regional or national discount in Exhibit 5.
store (Walmart or Target). In addition, these
centers contain a mix of several nationally
recognized and popular local tenants. Hutch THE POTENTIAL LOCATIONS
stores are primarily located adjacent to the
center's anchor. Mall locations must be on the Dalton
main corridor, as close to "center court," as Dalton produces most of the carpeting in the
economics (rent) will allow. Abell remarked, United States. Consequently, carpet mills are
"We don't care if it's the only center in the the major employers in Dalton. Stain Master
region. If the only space available is at the carpeting has been putting a strain on the city,J', 1
,
end of the mall, we won't go in there. Our water supply. Stain Master is said to require .
plan is to be a complement to the anchor and seven times the amount of water as re@i~
to feed off the traffic coming to it. We may carpeting and is rapidly becoming the largbSl~"'"·""
have a reputation for being picky and having proportion of carpeting produced. Expressirig
one of the toughest lease agreements in the concern over market viability, Abell s~i¢
business, but it's one of the main reasons for "If the Dalton area were ever to experience
our continued success." a severe drought, the carpet mills would be
forced to drastically reduce production. The',",
ensuing layoffs could put half the population
.,jp.
DATA SOURCES on unemployment." . ¥

Abell is using several reports generated The proposed site for the new store is the
by Claritas to help him decide which Whitfield Square shopping center located off ..•
location to choose for the next Hutch store. the main highway, approximately two miles. ..
He has chosen reports that describe the from the center of town (see Exhibit 6). A
10-mile ring around each of the proposed meeting with the developer, Abell was ple~ea ",-
locations. Exhibits 2 and 3 summarize these with several aspects of the strip center. lJi
reports. They contain detailed population, learned that the center has good visibiliQi
household, race, income, education, and from the highway, will be anchored by both
employment data, plus figures on retail sales WaImart and Kroger (a large grocery chaP,iJ,:.
and number of establishments. The reports also ,and has ample parking. Abell is also reasonablY,
provide information about women's apparel pleased with the available location within _~. .
sales and· give a market index that estimates center, which is one spot away from Walmart.
the annual per-person spending potential for However, he is concerned about the presence' .,'1L.,•.••,"'I"""I
the trade area divided by the national average' two large outparcels in front .of the center
 Cases 697

I .. would reduce the number of parking spaces
, and direct visibility of the center. (An outparcel
is a freestanding structure at the front of a mall,
., commonly a fast-foodoutlet, a bank, or a gas
station.) Other tenants in the center include
a nationally recognized shoe store, a beauty
salon, two popular restaurants (Chinese and
Mexican), and McSpeedy's Pizza at the end of
the center, as well as a Century 21 real estate
training school in the middle.

••
Population and Competitive Profile,
10·Mile Ring from Centers of Dalton and Hinesville, Georgia

2015 projection 93,182 64,195

2010 estimate 87,293 57,945
1999 Census 79,420 49,853
1990 Census 71,373 34,125
% change, 1999-2008 9.9% 16.2%
% change, 1990-1999 11.3% 46.1%
In group quarters (military base) 2008 .9% 11.2%

Continued
698 Retailing Management
-

Median household income $30,516

Average household income $40,397
$ex (% male)' 49';1%
Education Population age 25+ 49,298
No high school diploma 41.0%
High school only 28.6%
Coilege, 1-3 years 19.1%
College, 4+ years 11.3%
IWanufacturlng: nondurable g:oo"dS 42.3%

Sales Potential Index for Women's Apparel

 Cases 699

.EmIl
PRIZM Neighborhood Clusters

..
8.8
5.4°/. ':' 4.9~~(~'r}i
6.9
35.7 Hln~~IIe
10.2 Military quarters 11.9
14.6 Scrub pine flats 6.0

PRIZM Lifestyle Clusters

Ilg Fish, Small Pond
Small-town executive families; upper-middle incomes; age groups
3s-44, 45-54; predomlnanlly white. This group is married, family-
oriented, and conservative. Their neighborhoods are older. Best
. described as captains ollo·cal industry, they invest in their homes
•. : and clubs and vacation by car in the United States.
IllHatlndustrial
" .1iIi!iI'''' Low-Income, blue-collar families; lower-middle incomes; age
irir1••••.•
groups <24, 25-34; predominanlly white, high Hispanic. Nonunion
""-"="- •••...••~I labor found in this cluster, which Is comprised of hundreds of blue-
collar mill towns on American's rural backroads.
MlIIeS & Mills
__ .,..:.••• ""', Older families; mine and mill towns; poor; age groups 55-64,65+;
predominantly white. Down the Appalachians, across the Ozarks to
:;;~=;;:;IF''lI''1 ArIzona, and up the Missouri, thIs cluster is exactly as its name Im-
plies. This older, mostly single population with a few children lives
In the midst of scenic splendor.
Sbotluns & Pickups
• Rural blue-collar workers and families; middle income; age groups
3s-44, 45-54; predominantly white. This clusler is found In the
Northeast, the Southeast, and the Great Lakes and Piedmont Industrial
neighborhoods in America. Centered in the Bible 8ell, many back
country lolks are hooked on Christianity and country music.
Scrub Pine Flats
Older Alrican-American larm lamilies; poor; age groups 55-64,
65+; predominantly black. This cluster is lound mainly in the
coastal flallands of the Atlantic and Gull states Irom the James to
the Mississippi rivers. These humid, sleepy rural communities, with
a mix of blacks and whites, live in a seemingly IImeless, agrarian
rhythm.
New Homesteaders
Young middle-class families; middle Income; age groups 3s-44.
45-54; predomlnanlly while. This cluster is above-average for
college education. Executives and professionals work In local ser-
vice fields such as administration, communications, health, and
refall. Most are married; the young have children, the elders do
not. Llle is homespun wllh a locus on crafts, camping, and sports.
Red, White, & Blues
Small-town blue-collar families; middle income; age groups
35-54, 55-64; predominantly white, with skilled workers primarily
employed in mining, milling, manulacturing, and construction.
Geocentered In the Appalachians, Greatlakes"lndustrial region,

~g~;'1 regions. They are in blue-collar jobs; most are married with school-
age kids. They are chun:hgoers who also enjoy bowling, hunting,
and western highlands, these lolks love the outdoors.

~ sewing, and attending car races.

lack Country Folks
~:;;-:;;(I".P.+ Older farm families; lower-middle income; age groups 55-64, 65+;
ir ••••;;,.,;l~.'te- ·(iredomlnantly white. This cluster is ceJllered in the eastern uplands
h--"~_:'\j;.f;'" along 1 wide path from the Pennsylvania Poconos to the Arkansas
Ozarks. Anyone who visits their playground in Branson, Missouri, or
GaUlnburg, Tennessee, can attest that these are the most blue-collar
Military Quarters
Gis and surrounding olf,hase lamilies; lower-middle Income; age
groups under 24, 25-34; ethnically diverse. Since this cluster
depicts military life with personnel living In group quarters, Its
demographics are wholly atypical because they are located on or
near military bases. Racially Integrated and with the highest Index
lor adults under 35, "Military Quarters" like last cars, bars, and
action sports.

a rapid-deployment force base. Because the

LikeDalton, Hinesville has one major employer, . United States currently is involved in a number
the Fort Stuart arrny base. Abell recalls that of international activities, Abell is concerned
. pulariy priced stores generally do very well with a comment by a Hinesville native: "If
'~~militarytowns. In addition, Fort Stuart is these guys have to ship out, this place will be a
 700 Retailing Management

ghost town." The location under consideration

is the Target Plaza at the junction of State
Route 119 and US. Highway 82 (see Exhibit
7). The center is anchored by Target and a
grocery store that is part ofa popular Eastern
U.S. chain. The two anchors are located side
by side in the middle of the center. The spot
available in the center is a 6,800-square-foot
DISCUSSION QUESTIONS
1. How do the people. living in th~
areas compare with Hutch's target
tomer?
'i How do the proposed locations; me
. ing the cities, tenant mix, and the"i
tions within the malls, fit with It >

combination of three smaller units immediately location require~ents?

adjacent to Target. Other tenants in the center 3., Which location would you
include a bookstore, a waterbed store, a shoe Why?
store, an electronics retailer, a yogurt store, a
video store, and a movie theater. This case was written by Michael Levy, Babson College.

Exhibit 6
Whitfield Square Shopping Center, Dalton, Georgia

Parldn. area
 Cases 701

••
Target Plaza, Hinesville, Georgia

2 3 4· 5' 6 7