5 Ways Stein Mart is Trying to Pull Out of Sales Slump

8/18/2017
stein mart store

National fashion retailer Stein Mart blamed inventory woes for its sales decline after reporting a total sales decrease of 2.7% and comparable store sales decrease of 5% in its second quarter 2017.

"Our path to healthy financial growth begins with exceptional inventory management, said President MaryAnne Morin, who took the position in February.

For the first six months of 2017, total sales decreased 4% to $648.4 million.

"Our sales performance began slipping in the fall of 2015 and since then has been further impacted by the challenges we all see in the retail apparel industry," explained CEO Hunt Hawkins.

"Unfortunately, we were slow to react to the changing environment and lower traffic. So our inventories grew excessively, particularly in the latter half of 2016. This period for apparel retail has been particularly tough for the department stores and mall-based specialty retailers, while the off-price sector was less impacted with a continuing upward trend in sales, productivity and increased brand awareness."

Hawkins noted the company was behaving like a department store in terms of its merchandise acquisition and sales promotion, and going forward it's implementing initiatives to change course.

Find out the five initiatives the specialty and off-price retailer is putting forth to control its fate:

E-Commerce Improvements

E-commerce sales grew 41% during the quarter and online business represented 2.6% of the quarter's total sales.

Coming up this fall the company will launch real-time individualization that will customize views based on individual customers’ historical buying behavior.

Conversion has been already been increasing due to an expanded online assortment and site enhancements, according to the retailer.

"We've made good progress getting vendors to allow us to show their brand name or let the customer see the brand with a simple click," Morin also noted.

Ship From Store

Stein Mart will be piloting its new ship-from-store program this fall.

"This is an important initiative that could significantly impact both our e-commerce and stores business," said Morin.

Inventory

In the quarter, average store inventories were 15% lower than last year's second quarter. The company aggressively slashed prices on seasonal items to clean up inventories going into the third quarter.

"Our second quarter sales trends improved from the first quarter and were strongest in July as we more aggressively priced our clearance merchandise," said Hawkins.

"We are determined not to let inventories build to unhealthy levels again," said Hawkins. "It's not just about having the right quantity of merchandise on the floor; it's also about having the right kind of merchandise at the right time at the right value."

The company is hoping lower inventories will provide better margins from lower markdowns in the fourth quarter.

Marketing

In July, Stein Mart hired BOHAN, headquartered in Nashville, as its new marketing partner. Its new advertising campaign will be launched mid-September and will include more digital, social, and television advertising.

Stein Mart hopes the new agency will help it attract a new customer and increase brand loyalty.

"In the past, most of our marketing was tailored towards the customer we already had," said Morin. "Our new campaign is being designed not only better engage with our current customer, but to reach a new customer."

Store Layout

Stein Mart will roll out a new store layout to all doors by early September.

The retailer tested a new ladies apparel floor plan in 50 stores during the second quarter. The new flow creates an "easier and more shoppable experience."

Stein Mart will also open five new stores this fall to open a total of 10 new stores this year.

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