Tuesday Morning offers big discounts every day of the week, but not every week of the year. The closeout retailer sells discontinued merchandise from name-brand manufacturers at steep discounts. Its merchandise typically includes upscale linens, china, cookware, rugs, and collectibles that are not seconds, irregulars, or factory rejects. Tuesday Morning's 810-plus stores in 41 states operate only during monthly sales events (with the exception of January and July). The retailer keeps costs down by selling from low-rent locations and using seasonal help -- only about 22% of its workers are full-time employees. Its customers are primarily women from middle- and upper-income households.
Dallas-based Tuesday Morning operates in 40-plus states. The retailer's portfolio of stores is concentrated primarily in its home state of Texas (accounting for 13% of stores), California (10% of stores), and Florida (8% of stores).
Tuesday Morning specializes in selling high-end name-brand home furnishings, housewares, gifts, and other merchandise. Its stores are filled with the likes of Le Creuset and Calphalon cookware, Cuisinart and KitchenAid small appliances, Sferra and Peacock Alley linens, Kenneth Cole and Michael Kors fashion accessories, Lenox tabletop items, Hartmann and Samsonite luggage, Waterford crystal, and Hunter and Casablanca ceiling fans, among many other items.
Sales and Marketing
The company relies on a 1.4-million-sq.-ft. distribution center located in Dallas to distribute some 100 million units to its stores.
Advertising expenses have remained relatively constant, with Tuesday Morning spending $26.2 million in 2014, $27.5 million in 2013, and $28.9 million in 2012.
While Tuesday Morning has logged declining sales in recent years, the retailer in fiscal 2014 (ended June) posted modest -- 3% -- but noteworthy gains, resulting in $864.8 million in sales vs. $838.3 million in 2013. It attributes the overall revenue rises to a 6% boost in comparable store sales, thanks to a nearly 10% increase in customer traffic offset in part by a 3% drop in average ticket price. In recent years, Tuesday Morning has posted net income losses, including $10.2 million in 2014 following its $56.4 million loss in 2013. Cash flow has varied during the past five years; in 2014 cash provided by operating activities reached $31.2 million as compared to 2013's $3.2 million used by operating activities.
The deep-discount chain buys upscale brand-name merchandise no longer carried by department and specialty stores and sells it at 50%-80% below its competitors' prices.
Inconsistent sales trends and profitability at Tuesday Morning spurred the closeout retailer to adjust its inventory to focus on the most profitable categories. The retailer blamed the nation's housing crisis and deep recession, as well as liquidations at rival chains, including Linens n' Things, for flooding the market with closeout goods. In 2014, the company's in the final phase of its turnaround strategy, which includes selling off exited categories, expanding replacement categories, reducing clearance merchandise, and enhancing store layouts.
Unpredictable same-store sales also led Tuesday Morning to trim its store base. After more than doubling the number of temporary outlets it operates since going public in 1999, the retailer has been closing underperforming locations since. Still, and the historically fast-growing chain believes that the US market can support up to 1,250 of its part-time stores.