Citi Trends, which went public in May, tailors its urban fashion apparel to women, men and children, primarily African Americans with low to moderate incomes. Within this group, everyday discounted merchandise and branded merchandise are key, Anderson said. "Urban brands account for 35% to 40% of our sales," he noted, adding that the retailer discounts it merchandise by 20% to 60%.
With 214 stores in the South, Southeast and Mid-Atlantic states, Citi Trends posted a first quarter 2005 same-store sales increase of 6.9% and total sales spiked 32%. "Selling urban fashions off-price–-we think–-is a very good place to be," Anderson said.
During 2004, women's apparel accounted for 38% of sales; men accounted for 21%; and children accounted for 27%. Over 70% of the retailer's customers are African American. "Our core demographic group has agreater propensity to purchase apparel than the average consumer," Anderson pointed out. "African Americans spend 4.7% of their annual income on clothing compared to 3.5% spent by the average consumer."
Anderson notes that the African American population is growing, as is its buying power. More than 13% of the United State's total population will be African American by 2010, at which time that group will havethe collective buying power of $965 billion.
The retailer plans to open 40 new stores this year and 50 stores in 2007. "We operate in large attractive markets with attractive demographics," Anderson explained, adding that the Citi Trend stores average 8,500 sf of selling space, but have been growing to10,000 sf over the past three years. "We think our larger store size provides with the opportunity grow comps," he notes. Moreover, adding new categories such as accessories, intimate apparel and home décorcreates more growth opportunities.
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