Gordmans pitches business at consumer conference
Home & Textiles Today Staff -- Home Textiles Today, June 6, 2012
New York - Gearing up for its initial public offering, Gordmans pitched its prospects to the investor and analyst community yesterday at the Piper Jaffray Consumer Conference here.
Currently with 78 stores in 18 states, the 97-year-old, apparel and home chain announced in late May it would be holding an IPO.
"What's really exciting about Gordmans is that the growth in terms of geographic footprint and expansion is clear and our growth with respect to comparable store sales," noted Jeffrey Gordman, president, ceo and secretary.
In the most recent fiscal year, Gordmans reported net income of $25.2 million on sales of $551.5 million. For the first quarter ended April 28, the company posted $8.05 million in net income on sales of $133.9 million.
"[Those] are two catalysts driving the top line. That is one issue that I think investors don't fully appreciate," Gordman continued. "And then secondly, unless you've been in one of our stores, it's hard to fully appreciate our differentiated proposition...We're trying to optimize savings, selection, and the shopping experience in a way that truly sets us apart. We present a high-energy specialty store. We've got entertainment like a children's theater seating area and a men's sports seating area. It's just a fun, unique, energetic brand and shopping experience."
He also cited Gordmans "consistent" sales and store growth over recent years, especially since going public in August 2010. "We've added almost $100 million in top line revenues over last few years, translates to 20% growth in top line," he continued.
This year, Gordmans wil add 50% more stores to its roster over last year, or 9 new units total, and will enter two new states - Idaho and Utah.
"We don't have limitations from a financial constraint perspective to new store openings," said Gordman, adding that the chain can potentially grow to 300 stores or more throughout the country.
As it has been for a while now, home continues to be an important and growing component of Gordmans' sales mix. The division comprises about 30% of total store sales, and home comps have improved over the last few quarters," Gordman noted.
In the recent first quarter, "home décor was certainly a number one driver," he continued. "We think, from a macro-economic standpoint, that the [home] business could and should be more difficult with relation to [the slow market in] housing. However, if a retailer highly differentiates itself...it can perform better in [more challenging] macroeconomic times."
What has helped Gordmans home businesses succeed in both good and bad economic periods has been its merchandise mix, Gordman said.
"In home, we have so many different businesses, from décor items like window treatments [and others] to home essentials that include kitchen trends, textiles, pampered pet products. We've got a lot of diversity within home and lots of themes we can leverage, whether it's wine or icons such as birds and hearts, and color as well as key items."
To support growth in home, Gordmans recently expanded its home décor merchandising team with a second divisional merchandise manager "who we hired to help us take advantage of additional opportunities we see in home."
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