Hutch Case Analysis

Hutch Case
The Hutch store chain was founded in 1952 by John Henry Hutchison and is currently
looking to expand. Dave Abell, vice president of new business development, is searching for the
best location to open a new Hutch store. After a preliminary search he has narrowed his
options to two locations, Dalton or Hinesville. This case analyzes which location would be a
better fit for a new Hutch store.
To start, the population of Dalton closely matches Hutch’s target market. The company
targets women between the ages of 18-40 with lower middle/middle income who are
interested in the latest fashion. 31.2% of the population in Dalton is between the ages of 0-20
and 37.1% between the ages of 21-44. This is the largest percentage compared to the other age
groups in this location. The average income in this location falls within the target market as
well. The median income is $30,516 with the average falling right around $40,397. The target
market involves interest in the latest fashion so apparel and retail stores currently operating in
the area should be taken into consideration. This location has 21 women’s apparel stores and
26,634 total retail stores. These stores provide women the opportunity to express their style
and be involved in latest fashion trends, which is a key factor in sales if the new store were
located here. Finally, the town was estimated to be around 87,293 people in 2016, with a 2017
projection of 93,182 people. This shows that the town is growing and will have more consumers
Hutch could market to. A concern with a Hutch store in Dalton is the fact that the towns main
industry and source of revenue is the carpet mills. If there were ever a drought, this would
drastically reduce the carpet mills production and the population would face unemployment.
Next, we must analyze how Dalton’s tenant mix and the locations within the malls fit
with Hutch’s requirement. Every store must be located within 400 miles of a distribution center
and Dalton meets this requirement. Abell also wants the location to be located in a strip mall or
center. In Dalton, the strip center is located in Whitfield Square Shopping Center, which is only
two miles from the center of town and located right off the main highway. This provides great
accessibility and could bring in great business. Another policy is that the location must be next
to an Anchor store, which Dalton is able to provide due to the fact that they are anchored with
Walmart and Kroger. The new store would be one spot away from Walmart which provides
ample parking. It also has the presence of two outparcels which raises a concern of less parking
and visibility. Along with the anchors, Dalton also has a shoe store, beauty salon, two popular
restaurants, a pizza outlet, and real estate training school.
The other location Abell is considering is Hinesville. The people living within the trade
area must fit the same target market requirements as previously discussed. In this location, the
population between 0-20 is 40.2% and 21-44 is 47%. This would be a favorable location to place
a Hutch store due to the fact that the percentages are high. However, the income is much lower
in Hinesville compared to Dalton. The median is around $23,686 and the average is $28,677.
There are also a significantly lower number of women’s apparel stores at 8 and only 9,339 total
retail stores. This leads me to believe that women may be less interested in fashion but the
lower number of stores could provide an opportunity for style and fashion insights to grow. The
main concern with this location is that its one major employer is the Fort Stuart Army Base.
Abell states that popularly priced stores do not do well in this location. Due to the fact that the
United States is currently involved in a number of international activities, Abell is worried that
deployment could lead this location to become a ghost town.
The town of Dalton must also look at the fit for Hutch’s location requirement, analyzing
their tenant mix and locations within the mall. This location is placed within 400 miles of a
distribution center and is in the Target Plaza, which is at the junction of State Route 119 and US
Highway 82. These two busy roads can help bring in consumers and the location also provides
great accessibility. It also meets the requirement of having an anchor store. At this location,
Hutch would be anchored by Target and a grocery store, which are side by side and in the
center of the plaza. Another advantage of this location is that it would be 6,800 square feet
which could enable them to create a Hutch fashions and Hutch extra store. The spot available in
Hinesville is adjacent to Target, which would fit in well with Abell’s requirements; it also has a
bookstore, water bed store, shoe store, electronic retailer, yogurt store, video store, and movie
theatre in the retail mix.
After analyzing both locations, I would choose Dalton for the new Hutch location. This is
due to the fact that the population, as a total, is larger there. Even though Hinesville’s age
target market has a higher number, Dalton’s 2017 projection of 93,182 people is much larger
than Hinesville’s’ 64,195. This ensures that the town is continuously growing. Dalton has the
advantage of more females in town as well. Dalton consists of 50.9% females and there are
44.2% in Hinesville, this larger number of women in the market could lead to an increase in
Hutch’s sales. Not only is the population higher, but so is Dalton’s spending power. With a
higher income, consumers have the ability to spend more money and the possibility of making
purchases at Hutch is increased. This is essential if Hutch wants to run a successful store. Due to
the fact that Dalton’s location is strategically placed off the main highway, there is an increased
potential to bring in more customers due to the large number of highway users. It is much
easier to make a stop at a shopping center along the highway then having to drive into a town.
The fact that it is as close to “center court” as possible is also a huge advantage that meets
Abell’s requirements. Being located next to Walmart and a Kroger grocery store makes it
convenient for Hutch as well. If women are coming to the shopping center for groceries, they
can easily stop in the Hutch store. Due to the fact that a main concern is the outparcels and
visibility, Dalton can fix this issue by placing billboards and high signs so that people are aware
of the store when driving by. Finally, although there could be potential unemployment in
Dalton, the chance that Hinesville could become a ghost town is much riskier. Not everyone in
Dalton could lose their job which would provide Hutch the chance to still make a profit.

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