Tuesday Morning looking to build brands
Retail Editor 5 -- Home Textiles Today, October 31, 2013
Dallas - Tuesday Morning Corporation's turn-around efforts will feature a new merchandising strategy and an expansion of brand names, executives said during the company's quarterly call with analysts yesterday.
Michael Rouleau, ceo, noted that this is a year of "significant transition" for Tuesday Morning and offered a list of the key components of the new merchandise strategy:
- Expanding on brand names, "names our customers know and trust," he said, "and rebuilding the buyer relationship with suppliers to continue on this trend."
- Focusing on better and best levels of merchandise;
- Selecting broader assortments of merchandise and purchasing less quantity of each item versus narrower assortments and deep purchases as had been done in past - "a major change for us," Rouleau said.
These efforts go hand-in-hand with new and fresh merchandise arriving at Tuesday Morning stores every week to provide customers with "more and varied treasures;" reduced clearance markdowns; faster inventory turns; minimal markdowns and no inventory carryover to make way for new seasonal merchandise; eliminate problems related to "messy looking stores and major inventory write offs like we have taken in the past."
Part of the turnaround calls for more current inventory, and signs of improvement from these efforts are already showing, noted Jeff Boyer, who in September was appointed as the company's evp, chief administrative officer and chief financial officer.
"We believe the quality of our inventory has improved considerably," he said. "Currently, nearly 90% of our inventory is less than one year old. Last year at the same time, nearly 25% of our inventory had been in our stores over one year."
Altogether, he summed, this is "a very, very big and logical change for our company and the direction that we believe we must make and are making now to maximize customer interest in our stores and increase future sales and profitability."
As the company continued to plow through turn-around efforts during its recent fiscal first quarter, the 820-unit chain's net loss widened to $12.0 million, or $0.28 per share, compared to a net loss of $7.0 million, or $0.17 per share, in the same period last year.
Net sales increased 6.3% to $183.7 million, and comparable store sales grew 9.1% - comprised of a 13.4% increase in customer transactions and a 4.3% decrease in average ticket.
"I believe our first quarter results reflect early positive customer response to the initial changes we are making. Though we've made great progress thus far, there is much work yet to be done in the coming quarters," said Rouleau.