Cost Plus gets back to basics—selling import bargain goodies

Diablo speaks with the CEO of the Oakland-based retailer on how the company is faring during the economic downturn

During the holidays, I’ve always loved buying my gift-wrapping paper at Cost Plus. The reasonably priced paper never looked drug-store kitschy but artsy, a little bohemian, and definitely original. Every year, I also like picking up a new Christmas tree ornament or two. Many of the ornaments remind me of the locally handmade wood, metal, or cloth chotchkies I’d see for sale on the streets of Thailand (where I lived for three years) and other parts of Asia.

So, it had been disappointing to hear that the Oakland-based retailer, with about 290 stores, including six in the East Bay, started going through tough times even before the global economic crisis struck in September. It was more distressing to read a recent online news report that Cost Plus, celebrating its 50th anniversary, is one of 10 national retailers that could go out of business if holiday sales drop by double digits this year compared with holiday sales last year.

I thought of how the loss of this retailer could mean a big empty storefront in a prominent spot in downtown Walnut Creek (in the Olympic Place complex at California and Mt. Diablo boulevards). Cost Plus also employs about 350 people in its Oakland corporate office and about 7,600 nationwide.

Well, the “rumors” of Cost Plus’ demise have been greatly exaggerated. So says Cost Plus CEO Barry Feld, whom I reached by phone last week.

“I expect to be around celebrating our 75th anniversary,” says Feld, who was brought in as CEO in 2006 to reinvigorate the business. “We’re not going anywhere.”

Feld said the recent news report, predicting Cost Plus’ impending doom, reminded him of the need of tabloid journalism to accentuate the sensational and the negative. At the same time, he acknowledges that Cost Plus has been going through tough times. “I was brought in very specifically to do the turnaround. Cost Plus was in very serious trouble when I got here. The fundamental issue was that during the housing boom of ’03, ’04, Cost Plus turned itself into ‘PotteryBarn lite,’ a furniture store. I was a vociferous opponent of that strategy. I felt very strongly that this was a very dangerous merchandizing shift.”

Adds Feld, who lives in Lafayette with his wife and three kids: “For years, the company successfully sold an aggregation of inexpensive products—soaps, candles, or foods from around the world, inexpensive carpets, home décor items for the first-time home buyer. Cost Plus started to lose its core customer base when it started to fill our stores with expensive collections of furniture. The company started to slow down when the housing market started to slow.”

Now, Cost Plus is back in the business of selling mostly low-priced, iconoclastic items to the same kinds of people who shop at Trader Joe’s: educated singles and couples, with or without kids, living in or near urban centers, looking for items that are tasteful, original, but not super expensive. Feld says that 85 percent of items sold at Cost Plus now go for under $20 a piece.

And, yes, Cost Plus still sells wrapping paper, which I picked up during a shopping trip this past weekend. I also happened to need olive oil and snagged a liter bottle of Extra Virgin World Market brand for $7.99. A fan of Thai cooking (from my Bangkok days), I also picked up a packet a green curry paste for a $1.99. And, what the heck, I splurged on a little something for myself: a simple pair of dangling freshwater pearl and sterling silver earrings for $9.99.

Even though I don’t need new dishes right now, I could see myself tempted by the crockery: simple blue and white “Bistro” dinnerware for $2.99 per dinner plate, salad plate, bowl, and coffee mug. For slightly more than $20 ($27.99), there was a non-stick, heavy-gauge, ergonomically and environmentally friendly French skillet (my old omelette pan is on its last legs).
Cost Plus also sells a variety of scented candles from such exotic locales as Malaysia, India, and Indonesia, such as melon-scented votive candles from Malaysia for 99 cents each. And yes, there are throw pillows in brightly colored silks, and cottons, beaded and embroidered, and many for around $20.

And as avowed lover of the grape, I was tempted, but ultimately resisted (watching those calories!) the bottle of Snows Lake Zinfandel, made by Alameda-based Rosenblum Cellars. It’s regularly priced at $34.99 but was on sale at Cost Plus for $19.99.

Oh, what the heck, it’s the holidays. What’s a little indulgence? Maybe I’ll be back at Cost Plus this weekend.
 

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