Cost Plus banks on EDLP
August 31, 2007-- Home Textiles Today,
Oakland, Calif. -- Amid a same store sales decrease of 7.6% for the second quarter, and an 8% decline in customer traffic, Cost Plus World Marketreported renewed confidence in its new everyday low price (EDLP) strategy.
Barry Feld, ceo and president of the 296-store specialty chain, told analysts the company was focused on delivering a value-added strategy. He pointed to the success of its back-to-college event in July as an example of the strategy in action.
Major merchandise resets, including for the bath category, emphasize the Cost Plus shift to high-value, high-velocity products. Feld said the company expects a “tough” third quarter, but conservatively improving fourth-quarter results.
“Progress was made on the turnaround during the quarter including stabilizing our buyer margin, improving the supply chain, continuing to migrate customers away from high-low promotional pricing to an everyday value pricing strategy, and extending the reach of opening price points across more merchandise categories,” Feld said.
Net sales for the second quarter were flat year-to-year at $215.2 million. The net loss widened to $18.0 million, from a loss of $14.2 million for the same period last year.
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