Amazon prepares to expand distribution network in Virginia
The online giant is about to break ground on another fulfillment center.
The new facility, which will be more than 1 million sq. ft., will be located in Clear Brook, Virginia. The fulfillment center will employ more than 1,000 full-time associates who will be responsible for picking, packing and shipping larger customer items, such as big-screen televisions, kayaks and patio furniture.
Amazon currently employs more than 3,500 full-time hourly associates at its three existing Virginia fulfillment centers in Chester, Petersburg and Sterling, the company said.
“Our ability to expand in the Commonwealth is the result of two things: incredible customers and an outstanding workforce in the state,” said Akash Chauhan, Amazon’s VP of North America operations. “We are ex-cited to grow in support of the more than 85,000 authors, sellers, and de-velopers in Virginia growing their businesses and reaching new custom-ers on Amazon products and services.”
The new depot is part of Amazon’s recently announced plan to create more than 100,000 jobs across the U.S. over the next 18 months.
Consumer confidence bumps up to a 16-year high
Having reached a 15-year peak on February, consumer confidence reached a new peak in March, now standing at its highest level in 16 years.
The index's current reading is 125.6, up from 116.1 in February.
“Consumer confidence increased sharply in March to its highest level since December 2000 (Index, 128.6),” said Lynn Franco, director of economic indicators at The Conference Board.
“Consumers’ assessment of current business and labor market conditions improved considerably," she added. "Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”
The Present Situation Index also rose from 134.4 to 143.1. The percentage saying business conditions are “good” increased from 28.3% to 32.2%, while those saying business conditions are “bad” decreased from 13.4% to 12.9%. The percentage of consumers stating jobs are “plentiful” rose from 26.9% to 31.7%, while those claiming jobs are “hard to get” decreased moderately, from 19.9% to 19.5%.
The Expectations Index reflected a positive change in near-term expectations as well, rising from 103.9 to 113.8.
The percentage of consumers expecting business conditions to improve over the next six months increased from 23.9% to 27.1%, while those expecting business conditions to worsen declined from 10.5% to 8.4%.
Meanwhile, the proportion expecting more jobs in the months ahead increased from 20.9% to 24.8%, while those anticipating fewer jobs declined from 13.6% to 12.2%. The percentage of consumers expecting their incomes to increase improved from 19.2% to 21.5%, while the proportion expecting a decrease declined from 8.1% to 7.0%.
Value home décor retailer sees potential for major store expansion
When it comes to expanding its store portfolio, At Home has barely gotten started.
Reporting strong results for the fourth quarter and full year, the home décor retailer also said it plans to open 25 new stores this year, with the potential for almost 500 more locations over the long term.
“Our long-term growth runway is substantial with potential to increase store count to nearly five times our current footprint,” said Lee Bird, president and CEO, At Home, which ended the year with 126 stores. “We have a young brand that has significant room to grow and a value proposition that is increasingly relevant in today's retail environment. We are focused on disciplined execution and building on our progress in fiscal 2018."
Analyst Neil Saunders, managing director of GlobalData Retail, commented that the company’s growth prospects are sound.
“Although At Home has been expanding more aggressively, it remains a young chain and brand with a somewhat limited exposure,” he said. “There is plenty of headroom to expand via new stores as well as online.”
The analyst, however, noted there is one particular area where At Home could execute better: inspiration in its stores.
“Even new shops are very functional, and there is limited engagement with shoppers,” Saunders said. “Although this is partly a symptom of the big-box nature of the format, this is a lost opportunity in a category like home.”
At Home reported that its net sales for the fourth quarter, ended Jan. 28, rose 26.4% to $234.5 million. Same-store sales increased 7.1%.
Net income in the quarter was $15.3 million, compared to $58.8 million in the year ago period, primarily due to an income tax benefit recognized during the previous year’s period.
"We are pleased to report results for our 11th consecutive quarter of over 20% net sales growth and our 12th consecutive quarter of positive comparable store sales growth,” Bird said. “Our fourth quarter outperformance was driven by strong new store results accompanied by a 7.1% comparable store sales increase as we further elevated our holiday assortment and capitalized on an inventory opportunity identified earlier in the year, both of which were well-received by our customers.”
For the full fiscal year, net sales increased 23.1% to $765.6 million, driven by the net addition of 23 stores and a comparable store sales increase of 3.7%.
Net income was $27.1 million, which included a $2.7 million loss on the extinguishment of debt in the third quarter. This compares to net income of $3.6 million in the year-ago period, which included a $36.0 million pre-tax loss on the extinguishment of debt in the second quarter.