Forman Mills’ former owner is opening a new deep-discount store

Rick Forman is here to show you there are second acts -- in discount retailing.

Five years ago, Forman sold his chain of 36 Forman Mills clothing outlet stores for about $100 million, and thought he’d retire. But he whiffed on an early investment into the unicorn delivery service Gopuff. He considered buying a South Jersey flea market. Retailing “is in my blood,” Forman said.

One recent morning this month, the 61-year-old Forman was at it again. Customers lined up outside the entrance of his newest retail concept, Turn7, a deep discounter that stocks online returns, overstocks, bankruptcies, store stock pulls and closeouts, where a shopper can find a wide variety of products including mufflers, jeans, fryers, toys, or branded winter coats, and boxes and boxes of items in areas marked for $5, $10, and up to $100.

“We want shockingly low prices,” Forman said. “There is always a large vendor who is in trouble.” Forman has launched two locations, one in Northeast Philadelphia opened in September and his Moorestown location earlier this month. Forman closed a third location in a former Modell’s store on Roosevelt Boulevard as he concentrates on the other two. He expects to open three to five new outlets in the Philadelphia region in 2022.

Inside the Moorestown Mall store, Forman was prepping employees around 10:30 a.m. as Turn7 was preparing to open its doors at 11 a.m. A Ninja Foodi two-basket air fryer was going for $50 while a Keurig K-Mini coffee maker went for $100.

Put the merchandise out on the floor, Forman urged employees. He didn’t care if it was neatly presented. His basic concept, reflected in the store’s name, is to rapidly turn inventory three or four times a month so when the vendor’s bill is due, Forman has already sold the merchandise and reinvested it in new merchandise.

Forman also plans to keep real estate costs low with Turn7 by renting at bereft malls, many of them suburban, with free parking.

“I am not a mall operator. I don’t like the cement jungle,” Forman said. But he also said that he couldn’t pass up the leases and the shoppers will find him. “The consumer has been brilliant. They sniff out a deal. They come out of the woodwork.”

The long-running demise of big department stores has been well-told. Sears, Kmart, and Lord & Taylor failed to adapt to new retailing realities. But one sector of the bricks-and-mortar retailer, the off-pricers such as TJX Companies, Burlington Stores, and Ross Stores, have continued to prosper. They discount prices and make shopping a recreational experience -- a treasure hunt.

Burlington Stores, based in Burlington, N.J., had a rocky pandemic as shoppers were working remotely and holed up in their houses, shopping online. The easing of pandemic fears and more in-store shopping recharged Burlington, which Wall Street values at $18 billion. The company, on an expansion tear, has said it will accelerate store openings. In October 2013, Burlington, which was acquired by Bain Capital in 2006, went public again with an IPO at $17 per share. Shares now hover at around $275.

Sheri Lambert, professor of marketing at Temple University, said that shoppers will increasingly look to discount stores for bargains because of inflation. “We’re scared but we don’t want to stop shopping,” she said, adding that “I hate the craziness” of discount stores “but I love a good price.”

Forman launched the Forman Mills chain, popular for its radio and television ads blaring FORR-MANN-MILLS, in 1983 in a turn-of-the-century Frankford warehouse. Forman stocked casual and activewear clothing, school uniforms, belts, wallets, and sports jerseys. He opened stores in other parts of the Philadelphia area as well as Chicago, Cleveland, Baltimore, and Detroit, mostly where Walmart and Target didn’t go.

“That customer was the forgotten customer,” Forman said. “It was lucky for me. We had a captured audience. There was not a lot of competition and we were discounting. We brought everything to them by being in a dense Philadelphia neighborhood.”

When Forman sold Forman Mills in 2016, the company was based in Pennsauken and employed 3,000. Goode Partners L.L.C., a New York investment group whose investments over the years have included Villa clothing stores (the Philly-based former Sneaker Villa), La Colombe coffee shops, and Skullcandy earphones, bought it.

Forman says he won’t compete with Forman Mills. “My name’s on the building and most of my employees are still there. Yeah, I don’t want to hurt them. We are not going to look like Forman Mills at all.”

Lord & Taylor bit the dust in late 2020 when it liquidated, unable to survive retail trends and the pandemic. The classy department store operated almost 200 years and at one time sold merchandise in dozens of stores around the nation. The brand now exists only as an online retailer.

The former Lord & Taylor in Moorestown had a Ralph Lauren section on the second floor, with the brand embossed on burnished wood. Forman is now using the Ralph Lauren store-within-a-store area, in fact the whole second floor, as a warehouse and sorting area. On the first floor, Lord & Taylor’s high-end jewelry display cases remain intact. But instead of diamond necklaces or gemstone rings inside the glass, Turn 7 employees stacked discounted lamps, electronics, and air fryers on them.

“Lord & Taylor must be turning over in the grave,” said Forman, who was dressed in jeans, a long-sleeved light blue pullover, and leather boots, with a hole. “It’s controlled chaos,” he said. “It’s like off-the-truck. [Customers] are waiting for the goods. There is still a method to the madness of how we display.”

Forman also opened a Turn7 store in the Philadelphia Mills in Northeast Philadelphia. He said he has taken space in the former J.C. Penney outlet store, with 120,000 square feet. Forman has no other investors and is self-funding Turn7. He expects the company to be profitable in its first year and will staff a head office. He’s now running the company mostly from the floor of his stores and driving around in his Range Rover.

Mall operators have not always welcomed him because they like the fancier, Madison Avenue-type stores, Forman said. “The malls are cocky,” he said. “They don’t like to give in to an off-pricer.”

Two executives with the Pennsylvania Real Estate Investment Trust (PREIT), which owns the Moorestown Mall, attended Turn7′s opening earlier this month. The company, which emerged from chapter 11 bankruptcy in January, has worked to rejuvenate its malls.

They said that Turn7 brings customers from a wide area to the mall. “It doesn’t have to be the prettiest display,” said Joe Aristone, head of leasing for PREIT. “It’s a hunt.”

Forman said he is still thinking through his concept. “I don’t know what this reminds you of,” he said walking the floor of the Moorestown Mall outlet. “Individual garage sales or something.” He finds deals with vendors through a lifetime of contacts.

Bricks-and-mortar is not dead, he said. But “if the customer is not engaged with your concept, you’re dead,” Forman said.

At 11 a.m., Turn7′s doors opened and about 40 people rushed into the store, looking for deals. Most of them made a beeline, shuffling in a walk-run, for the most expensive -- and discounted -- merchandise in the former jewelry section.