The regional chain will abandon its 25-year-old discount strategy to become a family value department store, focusing on home, family apparel and leisure products. That will position Venture against retailers like J.C. Penney Co.
Starting the day after Christmas, the 115-store chain, based in O' Fallon, Mo., will begin a $42 million program to reconfigure the interior of the stores as well as increase merchandise assortments as part of its repositioning. Venture plans to complete the process by March 1996.
Many regional discounters like Venture have fallen prey to Wal-Mart, Kmart Corp. and Dayton Hudson Corp.'s Target Stores. It's nearly impossible for the regional chains to compete against the low prices and efficient operations of big discounters.
"Wal-Mart and Target are the two best operators in the discount store industry," said Philip Abbenhaus, an analyst for Stifel Nicolaus, St. Louis. "It is extremely difficult to compete with both of them and a panicky Kmart in the marketplace."
As a result, smaller discounters like Caldor Corp. and Bradlees have sought refuge under Chapter 11 bankruptcy protection, while others like Jamesway Corp. and Rose's Stores emerged from protection this year.
Unlike most regional discounters, Venture decided to reposition itself. Analysts believe Venture doesn't have many options other than implementing a new strategy.
"This is a smart move given the situation of the regional discounters in the Northeast," said Donald Stuart, partner at Cannondale Associates, Wilton, Conn. "The prognosis is much rosier for regional department stores than for the regional discounters at this point."
Venture is still struggling at the discount level. It reported a third-quarter loss of $13.2 million compared with net income of $983,000 for the year-earlier period. Sales were down 4.1% to $444.6 million with comparable-store sales dropping 8%.
Venture believes this repositioning was a chance that needed to be taken in order to survive.
"This is a bold move," said Cliff Campeau, senior VP-marketing. "But the real risk would be staying the same."
One of the big reasons the retailer is changing is because it no longer wants to compete on price.
"If you reduce your business and the relationship with your customer solely to price, then that customer can be bought away," Mr. Campeau said.
Venture will implement a new merchandising strategy by expanding its selection of brand name and private-label products while targeting working women and mothers.
To make the stores easier to shop, Venture will create 12 "destination" shops, which will be very much like little specialty shops, within the store. The shops will include home decor, women's petite shop, men's casual shop and a sports shop that features licensed team apparel and merchandise.
Venture will eliminate some departments, including sporting goods, automotive and hardware. The stores still will carry some sporting goods and hardware items within the appropriate "destination" shops, but automotive products will be eliminated altogether.
The retailer is working closely with new agency W.B. Doner & Co., Southfield, Mich., to launch its repositioning campaign in late February or early March. Venture signed on Doner in January for its $6 million to $8 million account. Publicis/Bloom, Dallas, formerly handled.
"We are very excited with the work that we are doing with the repositioning," Mr. Campeau said. "Right now, we are in Round 2 of the test, and so far, so good."