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NATICK, MA-BJ’s Wholesale Club, during a Q2 earnings call, looked to the future of a smaller, more accessible real estate market. Although the club company’s profit was down year-over-year, it was only a slight dip from $36.5 million in net income at the end of Q208 to $35.1 million this year.

President and COO of BJ’s, Laura Sen, explained that the wholesale club was planning a few smaller-sized stores with a footprint of around 85,000 square feet. The notion, Sen said, was to find a model that worked for a middle-sized market more efficiently than a larger club. The smaller-box offers BJ’s some flexibility in space, as well as an ability to push into a dense market, which they could not entertain with their full-box. “Certainly, we have the flexibility to run clubs like this and we know that they can produce some very attractive ROIs, so we are going to be able to slip into some marketplaces that we know competition could not go and within our current geography,” Sen said.

“I’ll just relate on the Cape in Hyannis where due to local restrictions, we could only put a 70,000-foot box roughly,” she said. “And we’ve seen some very attractive volumes and returns out of that small little place, so we know we can do it operationally, merchandising wise. We’ve got a pretty strong logistics capability that produces some really nice volumes out of that little tiny box on the Cape. So having seen that, we feel confident that at 85,000, we can do a lot.”

The total sales for the second quarter dropped 5.2% YOY to $2.5 billion, which included a negative impact from sales of gasoline of 10.6%. Going forward, the guidance for BJ’s is expecting a net income between $134 million and $140 million for the FY10 ending on January 30th.

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