Urban clothier Citi Trends opens Sacramento outlets

Oct 30, 2009 (The Sacramento Bee - McClatchy-Tribune Information Services via COMTEX) -- CTRN | Quote | Chart | News | PowerRating -- Sacramento has become the focus of value-priced, urban clothier Citi Trends' move into California.

The Savannah, Ga.-based company, which is pursuing an aggressive expansion even as other recession-battered retailers wither, has opened five stores statewide this year, including two in the Sacramento area.

Citi Trends opened its newest store earlier this month in the Stockridge Plaza at Stockton Boulevard and Fruitridge Road. Another opened in August at the Watt Towne Center on the corner of Watt Avenue and Elkhorn Boulevard in North Highlands. Three other outlets, one in Oakland and two in Southern California, opened earlier this year.

It's the first foray into California for the 51-year-old retailer with 380 stores in 24 states.

"We knew we wanted to be there anyway, because California has an eighth of the U.S. population," said Bruce Smith, the company's chief financial officer. "There's a need for urban apparel in the California market."

The store advertises that its prices are 70 percent lower than department store prices and it carries clothing for women, men and children.

The store brings to the market a merchandising strategy targeting African American households in the moderate income range, said Patrick McKeever, an analyst with MKM Partners who tracks the company.

"It's the only emerging national player," he said.

Though other stores, such as AJWright, an offshoot of T.J. Maxx, are trying to capture some of that market, Citi Trends is the boldest presence going after an underserved market, McKeever said.

About half of Citi Trends' merchandise is made up of national brands, such as Phat Farm, Baby Phat, Southpole and labels like Dereon -- from pop singer Beyonce -- and Rocawear, from her husband, singer and entrepreneur Jay-Z. All help to draw a 70 percent African American customer base, Smith said. The store also offers its own private labels.

Smith declined to talk about how sales were going at the California stores, citing competitive reasons, except to say the stores have done well wherever they have opened.

The company will open 45 stores this year and has closed only three, including one that was phased out to make room for a newer store, he said.

Citi Trends has no online operation, focusing only on brick-and-mortar sales in stores that typically have about 10,000 square feet. The stores generally are in strip shopping centers with a grocery store or a dollar-type store.

The company began as a wholesaler of women's hosiery and undergarments in Savannah just after World War II and opened a retail store in 1958 with the name Allied Department Store.

Spreading throughout the Southeast, Allied stores became part of a large conglomerate but were eventually sold off. By 1997, a new management team had begun to breathe life into the dying brand, revamping it into Citi Trends in 2001.

The publicly traded company has not been immune to the recession -- it saw same-store sales drop 12 percent in the second quarter from last year. But on a year-to-year basis, Citi Trends, saddled with little debt, has fared better than most clothing retailers, McKeever said.

In some years, Citi Trends has reported double-digit growth in same-store sales, he said.

Citi Trends' new stores are profitable, he said, showing a 90 percent return on investment the first year, he said.

Smith declined to say whether there would be more California stores or more in the Sacramento region.

"We'll see how they work out before we step further," he said.

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Call The Bee's M.S. Enkoji, (916) 321-1106.

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