BOSTON -- BJ's Wholesale Club, Natick, Mass., said the addition of gas stations to the company's stores played a major role in helping increase membership this year.
Jack Nugent, president and chief executive officer, told the company's annual meeting at the Fleet Conference Center here it will open 12 new clubs in 2001 and add 25 gas stations to the 34 now in operation.
This was BJ's 10th consecutive year of record sales, Nugent told the meeting. This growth is expected to continue, he said.
What makes this growth possible, he added, is the company's sound capital base.
BJ's cash and cash equivalents totaled $120.4 million as of Feb. 3, and there were no borrowings outstanding at that date. The company said it expects its current resources, together with anticipated cash flow from operations, will be sufficient to finance its operations through Feb. 2, 2002.
BJ's private-label products brought in additional revenues in their second year, the company said. At the end of 2000, private label had achieved a sales penetration rate of 3.3% with 200 items available in the program. BJ's said its long-term goal continues to be a 10% penetration rate in five years and as much as a 20% penetration rate with the maturation of the program.
The gas stations, added on to existing clubs or built prior to erecting a new club, helped to bring the wholesale club to 6.5 million members by February. Average gasoline sales for BJ's gas stations open for a full year was 4.2 million gallons, placing them among the largest volume gas stations in their respective markets.
Sales have also increased in the clubs that have gas stations, the company said.
The 12 new clubs will keep the company's growth rate at about 10%, which is even with 2000's growth of 11 new stores, BJ's said. The new clubs and gas stations -- including six in Florida, with three of those in Orlando -- will bring the company total to 120 clubs and 59 gas stations, the company said, noting that the new clubs will employ approximately 1,200 people.
BJ's said it expects no significant changes in its business strategy in the coming year.
"We think what we're doing is working," said Eileen H. Kirrane, assistant vice president and investor relations director. "We're a growing company, and we will continue to grow as long as we can."
The company said it is concentrating much of its expansion efforts in the South, broadening a base of stores located mainly in the Northeast.
Merchandise in all the BJ's clubs will remain similar, Kirrane said, although there will be some differences in apparel and food in the new clubs.
What has made BJ's successful, she added, is concentrating on the general consumer, selling products in bulk, and negotiating with manufactures to reduce the size of bulk products so they are more compatible with customer usage.
The average BJ's customer, Kirrane said, is between 35 and 55 and holds a number of credit cards. The vast majority, 90%, own their own home.
"We're talking about relatively affluent people," she explained, adding that BJ's will continue to focus efforts on appealing to this market.
After the meeting, BJ's said its board has approved a stock repurchase program under which management is authorized to repurchase up to an additional $50 million of the company's common stock.
Stock repurchases will be made from time to time, at management's discretion, in the open market or in privately negotiated transactions, the company added.