Stein Mart's style is to operate department-like stores that feature discount prices. With some 260 shops in some 30 states, it sells off-price women's, men's, and children's brand-name clothing. Fashions range from casual to formal. Stein Mart also sells jewelry, handbags, linens, home decor, and gifts. Independent firms lease Stein Mart's shoe and fragrance departments. Its upscale women's boutiques are sometimes staffed by socialites who work part-time to receive employee discounts. Russian immigrant Sam Stein founded Stein Mart in the early 1900s. The company had one store in Greenville, Mississippi, until 1977, when it began growing rapidly. Chairman Jay Stein, the founder's grandson, controls Stein Mart.
Stein Mart's sales and store count are on a downward trajectory. The company has seen its sales decline in each of the past five years, falling about 20% since fiscal 2008. In fiscal 2012 (ends January) sales dipped nearly 2% vs. the prior year, while net income dropped by 59% over the same period. However, Stein Mart's cash flow increased and the company has no outstanding debt. Also, the off-price apparel chain is doing a good job of controlling inventory, which declined 5% last year.
In tandem with shrinking sales, Stein Mart's store count has also declined by more than a 15 locations during the past few years. While it's taking a conservative approach to growth going forward, the company plans to maintain its presence in the southeastern US and Texas. During fiscal 2013, the retailer plans to open seven stores and close three, while also relocating five stores to better locations. (The chain is looking to strengthen its real estate portfolio in current markets.) In fiscal 2012, the company quit the Washington, D.C. market, after abandoning Iowa the year before.
To spur sales, Stein Mart in the fourth quarter of fiscal 2012 implemented a new pricing strategy, including reducing coupons and selectively lower prices on certain key merchandise. In the first quarter of fiscal 2013 the company sales fell 0.1% vs. the year earlier period.
Other measures the business has taken include reworking its supply chain by transitioning to a third-party logistics network to deliver merchandise to the stores in a more efficient manner. The move enabled the company to pull merchandise from various vendors from three store distribution centers and its merchandise will be ready, at that point, to hit the selling floor. For the effort, the retailer is looking at an annual savings of up to some $25 million.
Stein Mart typically targets a well-dressed woman age 35 to 60 who boasts a higher than average income. In addition, the company concentrates on "missy customers" who are fashion-conscious and seek value. To cater to this customer, its stores offer specialty merchandise not found among the general offerings at department stores and it banks on this for its overall appeal. Stein Mart is looking to lure younger and Hispanic shoppers into its stores with an improved mix of distinctive, inexpensive merchandise. About 9% of its 2012 sales were generated from private-label or exclusive products. While the retailer's buyers shop among some 1,300 vendors for the store's merchandise, Stein Mart carries a consistent mix of apparel and accessories across its store base. To entice its most loyal Stein Mart customers, it operates an Elite Preferred Customer program (launched in 2009).
Eschewing shoes, Stein Mart prefers to outsource its footwear department to proven shoe retailers. DSW is the exclusive operator of shoe departments in all of Stein Mart's stores.
Chairman Stein owns about 35% of the company's shares. He added the title of interim CEO following the retirement of David Stovall in September 2011. Stein previously served as CEO from 1990 until 2001.
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