The Container Store Group Profile
The Container Store Group, Inc. (The Container Store) operates as a specialty retailer of organizing solutions, custom spaces and in-home organizing services in the United States.
The company provides a collection of creative, multifunctional and customizable storage and organization solutions that are sold in the company’s stores and online through a high-service, differentiated shopping experience. The company features The Container Store Custom Spaces (‘Custom Spaces’) exclusive products consisting of the company’s elfa Classic, elfa Décor, Avera and Preston systems, which are wholly-owned and manufactured by The Container Store. Custom Spaces includes metal-based and wood-based custom space products and in-home installation services. The company’s customers are highly educated, very busy and primarily homeowners with a higher than average household income. The company’s customers crave discovery, inspiration, and solutions that simplify their lives and maximize their spaces within their homes.
Segments
The company operate through two reportable segments: The Container Store (‘TCS’) and Elfa.
TCS
The Container Store (‘TCS’) consists of the company’s retail stores, website and call center (which includes business sales), as well as the company’s in-home services business. The company operates stores with an average size of approximately 24,000 square feet (18,000 selling square feet) in 34 states and the District of Columbia. The company also offers all its products directly to customers through the company’s website, responsive mobile site and app, call center, and in-home design specialists and in-home design organizers. The company’s stores receive substantially all its products directly from one of the company’s two distribution centers. The company’s first distribution center in Coppell, Texas, is co-located with the company’s support center and call center, and the company’s second distribution center is located in Aberdeen, Maryland. The company operates the C Studio Manufacturing, Inc. (‘C Studio’) facility in Elmhurst, Illinois, which designs and manufactures the company’s premium wood-based custom space product offering, and is included in the TCS reportable segment.
Elfa
Elfa, The Container Store, Inc.’s wholly owned Swedish subsidiary, Elfa International AB (‘Elfa’), designs and manufactures component-based shelving and drawer systems and made-to-measure sliding doors. Elfa’s shelving and drawer systems are customizable for any area of the home, including closets, kitchens, offices and garages. Elfa operates three manufacturing facilities with two located in Sweden and one in Poland. The company’s TCS segment is the exclusive distributor of elfa products in the U.S. Elfa also sells its products on a wholesale basis to various retailers in approximately 30 countries around the world, with a concentration in the Nordic region of Europe.
Strategic Priorities
The company’s three strategic priorities include deepening its relationship with customers, expanding its reach, and strengthening its capabilities.
Product Collection
The company offers over 10,000 products designed to provide customers solutions that simplify their lives and maximize their spaces within their homes. Each year, the company introduces approximately 1,800 new SKUs. The company’s solutions-based selling approach (versus items-based) is delivered by the company’s highly trained salespeople.
The company’s stores are typically organized into 14 distinct lifestyle departments. The types of products sold in each department are as follows:
Avera: Custom Space offering (the company’s exclusive system with a custom built-in look, touch open full extension drawers with soft close, and integrated lighting).
Bath: Countertop Organizers, Cosmetic and Jewelry Organizers, Shower and Bathtub Organizers, Drawer Organization, and Cabinet Storage.
Closet: Shoe Storage, Hangers, Drawer Organizers, Boxes and Bins, Hanging Storage Bags, Garment Racks, and Jewelry Storage.
elfa Classic & elfa Décor: Includes elfa collection of Ventilated and Solid Shelving and Drawer Components and Systems, Wall and Door Rack Solutions, Accessories, Utility and Garage Systems, and Sliding Doors.
Gift Packaging: Gift Wrap and Tags, Ribbons and Bows, Gift Wrap Organizers, Gift Bags and Sacks, Gift Boxes, Tape, Small Boxes, Tins, and Divided Boxes.
Hooks: Wall Mounted, Adhesive, Magnetic, Overdoor, Command Hooks, Wall Mounted shelves and Floor Protection.
Kitchen: Canisters, Jars, Lunchtime Essentials, Bulk Food Storage, Plastic and Glass Food Storage, Drawer Liners and Organizers, Countertop Organizers, Dish Drying Racks, Cabinet Storage, Pantry Organizers, Kitchen Gadgets, and China Storage.
Preston: Custom Space offering (the company’s exclusive custom luxury wood-based solid closet system with doors, drawers, integrated lighting and accessories).
Laundry: Step Stools, Hampers, Laundry Bags and Baskets, Clothes Drying Racks, and Cleaning Tools.
Office: Desktop Collections, Paper Storage, File Carts and Cabinets, Literature Organizers, Message Boards, Media Storage, Photo Storage, Display, Small Craft and Parts Organizers, and Desk Chairs.
Shelving & Garage: Free Standing Shelving, Wall Mounted Shelving, Cube Systems, Component Shelving, Desks, Chairs, and Garage.
Storage: Drawers, Boxes and Bins, Totes, Crates, Carts, Toy Storage, Archival Storage, Storage Bags, Specialty Bins, and Boxes and Cubes.
Trash: Kitchen Step-on and Sensor Cans, Recycle Bins, Composting, Wastebaskets, Open Cans, and Trash Bags.
Travel: Luggage, Clothing Organizers, Cosmetic and Jewelry Organizers, Travel Bottles, and Travel Accessories.
In order to offer the company’s unique collection of products and to execute a competitive merchandising and business strategy, the company works to form meaningful, long-lasting relationships with vendors from around the world.
Distribution
In the TCS segment, the majority of the company’s merchandise flows through one of the company’s two distribution centers, prior to transport to the company’s retail stores and/or online customers. The company’s first distribution center is co-located with the company’s support center in Coppell, Texas. The approximately 1.1 million square foot facility was designed and constructed specifically for The Container Store and is consisted of approximately 100,000 square feet of support center space and approximately 1 million square feet of distribution center space. The company’s second distribution center located in Aberdeen, Maryland is approximately 600,000 square feet and is consisted primarily of distribution center space. The company also operates a 58,000 square feet domestic manufacturing facility in Elmhurst, Illinois.
The company’s distribution centers are utilized for retail store replenishment and direct-to-customer order fulfillment. The company utilizes third party truckload carriers to transport all of the company’s products to its stores and major parcel carriers for direct-to-customer order deliveries. The company also continues to invest in supply chain system enhancements for increased logistics network support.
Elfa utilizes a broad network of third-party carriers to deliver products from its manufacturing facilities to customers worldwide.
Intellectual Property
The Container Store’s trademarks, product designs and copyrighted works have significant value and as such, the company vigorously protects them against infringement. The company’s ‘The Container Store,’ ‘Welcome to the OrganizationSM,’ ‘Foundation Principles,’ ‘Organized Insider,’ ‘Preston,’ ‘Avera,’ ‘Contained Home,’ ‘elfa,’ and ‘Air of Excitement’, trademarks and certain variations thereon, that are used for the company’s product lines and sales campaigns, are registered or are the subject of pending trademark applications with the United States Patent and Trademark Office and with trademark registries of applicable foreign countries. In addition, The Container Store owns domain names, including ‘www.containerstore.com,’ ‘www. closets.com’ and others that include the company’s trademarks. The company also owns several elfa utility and design patents, which protect Elfa’s closet and shelving systems. The company has a utility patent for TCS’s proprietary retail shopping computer systems, and design patents on select private label products. The Container Store has copyrights in the company’s website and marketing material.
Seasonality
The company’s unique offering of organizing solutions, custom spaces, and in-home services makes the company less susceptible to holiday season shopping patterns than many retailers. The company’s quarterly results fluctuate, depending upon a variety of factors, including the company’s product offerings, promotional events, store openings, the weather, remodeling or relocations, shifts in the timing of holidays, timing of delivery of orders, competitive factors and general economic conditions, including economic downturns as a result of unforeseen events, such as pandemics, inflation, and supply chain disruptions, among other things.
Regulation and Legislation
The Container Store sources a significant portion of the company’s products from outside of the United States of America. The United States Foreign Corrupt Practices Act and other applicable anti-bribery and anti-kickback laws and regulations generally prohibit companies and their intermediaries from making improper payments to non-United States officials, for the purpose of obtaining or retaining business. The Container Store ensures that the company’s policies and vendor agreements mandate compliance with applicable laws and regulations.
History
The Container Store Group, Inc., a Delaware corporation, was founded in 1978. The company was incorporated in 2007.
