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The Container Store: The next big economic indicator?

David Gura Nov 1, 2013
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The award for most anticipated IPO of the season would probably go to Twitter, which is doing its road show now, to gin up interest. But the award for biggest surprise by an IPO? That might go to The Container Store. The company went public this morning, and in very short order, the share price practically doubled.

It has made us wonder if investors’ interest in a consumer product retailer like this one signals a strength in the economy that doesn’t show up in other measures. 

At The Container Store in Washington, D.C., whole walls are covered with clothes hangers. There are blue boxes, green boxes, red boxes. There are containers that are circular and cylindrical and  square and rectangular, which are shaped like Legos. There are containers to hold containers, and there are organizers of every sort.

Melinda Green spent $25 on a shelf and some mesh bins at the chain’s Arlington, Va., location.

“I’m buying stuff to organize my stuff,” she says. “If I didn’t have as much disposable income, I would sure find other ways to find things to fit in my closet.”

According to Kit Yarrow, a consumer psychologist at Golden Gate University, “Stuff management is what this store is all about, and stuff management is only top of mind for consumers when they’re buying again.”

The Container Store’s success points to another way the chain reflects America’s economy today, says Burt Flickinger III, a consumer industry consultant who runs the Strategic Resource Group. He’s studied the chain and says a big chunk of its business comes from workers who are drilling for oil and natural gas in places like Texas and North Dakota.

“The people work two weeks on, two weeks off,” he explains. “So they have to use the things from The Container Store to take their personal possessions back and forth.”

But Flickinger says, by his read, there’s another lesson to be learned here about the American economy – one that isn’t as positive.

“Shoppers are still scared, so they’re storing up their clothes and the possessions that they’ve already purchased.”

In other words, they’re refurbishing closets and kitchens instead of remodeling them. 


 

8 Things You Can Contain With Containers from the Container Store:

1. Other containers.

2. Dog waste (at least the bags).

3. Those last drops of lotion. That last squeeze of toothpaste.

4. The mess inside of your water bottle.

5. The fallibility of human memory.

6. The failures of human decency.

7. Slices of cheese. Strips of bacon. Artisanal mustard. A single tomato. Loaves of bread. For even more efficient storage? You guessed it. 

8. Yourself. Reusable, at $1.99.

 

And now, 6 Things You Cannot Contain With Containers from the Container Store:

1. The demand for Cronuts.

2. Detroit Lions’ wide receiver Calvin Johnson.

3. “Breaking Bad” spoilers. It is time to give up.

4. These pandas: http://www.youtube.com/watch?v=u155ncSlkCk

5. Listicles.

6. Your wit. What else cannot be contained? Tweet us @MarketplaceAPM or send us your ideas on Facebook.

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