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Nine West Retail Stores (NRWS) is an example of a well-organized and well-managed store that has experienced continuous growth since its inception. A retail store that started off as a manufacturer and wholesaler specialized in women’s footwear has since diversified. It diversified from manufacturing to include retailing of different types of women’s footwear and other accessories. This saw the company earn enormous revenue and experience continuous growth over the years. As a result, the company aimed at becoming the best lifestyle store with a global presence. The success of NWRS is due to well-organized merchandise. Merchandising at NWRS is organized in a way that ensures optimal performance. This has placed the retail store in its current position in the retail stores’ category.
History of NWRS
The history of NRWS is a success story that can be discussed with respect to its organizational structure. The structure has given it a competitive advantage in the market. NWRS is just a division of the Nine West Group Inc. This division is the most profitable one, accounting for 49% of the total company’s revenues. The success is attributable to its structuring. In 1997, there were 429 stores belonging to NWRS. The retail store focused on opening up new outlets to get closer to the customer.
Growth was achieved through the acquisition of other footwear companies and opening up of new store outlets, both locally and internationally. In May 1995, Nine West purchased the footwear division of the U.S. Shoe Corporation. The purchase enabled it to add new brands of shoes to its product line, making it a giant in the women’s footwear industry. On the other hand, acquisition and opening up of new stores made NWRS gain a remarkable presence in Asia and Europe.
NWRS’s quest for a new store made it an international retail store, especially after buying the UK-based Shoe Studio Group. In addition, NWRS’s strategy to become a complete lifestyle company made it expand its product line to include handbags, legwear, and jewelry, among other items. NWRS has two separate divisions: the merchandising and store organization (Raman and Welch 24). The merchandising organization deals with assortment, purchasing, pricing, and decides on how goods should be displayed. Store organization is responsible for staffing, customer service, and controlling of selling expenses.
The overall organization of NWRS gives the company a competitive advantage. Acquisition and opening of new stores increase its market coverage enabling it to get closer to the customer. Purchasing new companies enables it to increase its product brands, making it the preferred place for shopping. In addition, being a full lifestyle company makes it the preferred destination for shopping (Raman and Welch 26).
Merchants and Retail Directors at NWRS
Merchants and retail directors play a vital role at NWRS. Their first role is to market the products sold by the store. They communicate directly with customers and sell their products on behalf of the company. Secondly, they monitor and advise the management on new trends. The information provided is used by the management in deciding how to allocate resources and deciding the kind of products to offer. Thirdly, they preview the product in a forthcoming windfall. The information they collect from the preview is used to stock the retail stores. Finally, they forecast product demand. The forecast is used to stock the store.
Merchandising Organization and Incentives
The success of the retail stores is attributed to the company’s merchant organization and incentives. The company’s retail directors are centrally located at the company’s headquarters and are accountable for 50 to 60 stores. The retail directors are assisted by teams of assistant directors who carry out market research and report to them. The president makes decisions concerning the company based on information provided by by-merchandise managers. The company fosters good performance by rewarding retail directors with year-end bonuses based on their performance. It rewards them with15% of their annual salary if they exceed the year’s expectations (Raman and Welch 13).
The organization structure ensures that the president and the merchandise manager maintain control over retail directors by virtue of their location at the headquarters and the fact that they report to the merchandise manager.
NWRS versus other Fashion Stores
NWRS is different from other fashion stores in the way it is structured. Merchandising hierarchy at NWRS is organized according to the region, with one director managing 50 to 60 stores. On the contrary, other fashion stores are organized according to responsibility. For instance, at Wal-Mart Store Inc, each store has its retail manager located in the region where the store operates. The retail manager is answerable to a regional manager (Yang). Secondly, NWRS deals with lifestyle products where retail managers are actively involved in stocking and decision-making concerning stores in their region. However, for Wal-Mart, the stocks are usually pre-determined, and the retail manager is not actively involved in decision-making (Yang).
Merchandising at NWRS is organized to ensure optimal performance. It is its performance that has placed it in its current position in the retail stores’ category. The company’s strategy to use incentives to stimulate performance has many results. One of them is it ensures that the retail managers make decisions that are optimal for the company. Furthermore, the organizational structure ensures efficient control of the company and also reduced internal competition. NWRS’s structure and the organization have scaled it to what it is today, one of the best lifestyle stores in the world.
Raman, Ananth, and Colin Welch. Merchandising at Nine West Retail Stores. 2nd ed. Harvard Business School Case, 2001. Print.
Yang, Fan. “Strategic Analysis of Wal-Mart.” Washington Research Writing Consortium. N.p., 2009. Web.