Apparel retailer expanding outlet store concept after terrible Q4
Express Inc. is betting on e-commerce, outlet stores and a more curated mix to help revive sales after a rough fourth quarter.
The young women’s apparel retailer’s profit plunged 59% to $22.8 million in the quarter ended Jan. 28, in line with expectations, amid increased discounting and weak mall traffic. Earnings per share fell to $0.29, from $0.67 in the year-ago period.
Net sales dropped 11% to $678.8 million. Same-store sales, including online, fell 13%. E-commerce sales rose 9% over the year-ago period, making up 25% of Express’ fourth quarter net sales.
The retailer expressed confidence about its performance going forward, with online and factory outlet stores expected to help boost sales. On a call with analysts, executives said the company will open 19 Express Factory Outlet locations in 2017, and also convert 20 regular stores into outlet units.
Express also plans to improve its merchandise mix through a more curated selection.
“As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment,” stated David Kornberg, president and CEO. “As our industry adapts to changing consumer preferences, we continue to invest in our omnichannel and marketing capabilities to ensure that we capitalize on this evolution.”
Going forward, Kornberg said initiatives underway at Express will translate into stronger performance throughout the rest of the year.
“These initiatives include improving the fashion clarity in our stores through reduced choice counts, launching a new brand campaign, introducing compelling new products, and improving upon key existing categories,” he said. “We also expect to benefit from the relaunch of our customer loyalty program and our new IT systems, which will foster more efficient decision making and precise planning."
For the year, the company reported profit of $57.4 million, or 73 cents per share. Revenue was reported as $2.19 billion.
Express currently operates more than 650 retail and factory outlet stores.
Women’s apparel brand improves merchandise planning
In an omnichannel world, success is based on presenting the right products in front of shoppers when — and where — they are ready to make a purchase.
Soft Surroundings quickly learned that the more it expanded however, the harder this task became. Choosing the right allocation and merchandise planning solution was only the first step in the brand’s journey. By partnering with Columbus Consulting International, the chain was able to streamline the design, deployment and implementation of its new solutions.
The lifestyle brand began as a catalog-based retailer in St. Louis in 1999. After successfully driving sales across its catalog and later, an e-commerce site, the company opened its first retail store in 2005. It currently has 43 stores across the U.S. and plans to open more locations throughout 2017.
With an increasing omnichannel presence however, Soft Surroundings needed to update its allocation and merchandise planning solutions to meet growing demand and new business needs.
After selecting a solution provider for their new merchandise planning operations, Soft Surroundings tapped Columbus Consulting to complete the business process, design and implementation. The allocation portion is projected to be completed by the second half of 2017 and the merchandise planning system will be completed in late 2017, the retailer said.
“We selected Columbus Consulting based on their outstanding track record and the incredible value that they provide,” said Josh Rosenfeld, director of planning, allocation and procurement, Soft Surroundings. “Unlike other consulting companies, every consultant we engage with has the experience and expertise we need to make these projects successful.”
Retailer continues Canadian expansion
Saks Fifth Avenue Off 5th announced plans for two new stores in Canada.
The retailer plans to open a location at CF Markville in Markham, Ontario. The approximately 27,000 sq. ft. store is scheduled to open in 2018.
“Ontario is a key market for Saks Off 5th in Canada and we’re excited to continue to grow our presence there,” commented Jonathan Greller, president, Saks Off 5th and Gilt, which are part of Hudson’s Bay Company.
In addition, the company plans to open a store at CF Market Mall in Calgary, Alberta. The approximately 26,600 sq. ft. store is scheduled to open in 2018.
“We’re excited to announce our second Saks Off 5th location in Calgary, which continues to be a key growth market for us,” commented Greller.