Stein Mart's style is to operate department store-like stores that feature discount prices while maintaining an upscale vibe. With about 290 shops in some 30 states as well as an online presence, 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. An independent firm leases Stein Mart's shoe departments. Its target customers are mature women with household incomes of $100,000 and a taste for bargains. Stein Mart tries to place stores in shopping malls in upscale areas. Chairman Jay Stein, the founder's grandson, controls the company.
Stein Mart offers customers merchandise found in better department stores and specialty stores. Unlike other retailers who peddle discounted apparel and accessories, the company offers a merchandise locator services, a Preferred Customer program, co-branded and private-label credit card programs, and electronic gift cards.
Florida-based Stein Mart serves customers in about 30 US states, primarily high-growth states such as its home state as well as in Texas, California, and North Carolina.
Sales and Marketing
To maintain traffic in its stores, the retailer lures customers with full-color circulars that are inserted into newspapers and mailed directly to homes. It also leverages direct mail, newspaper run of press advertising, and email to distribute its sales promotion messages. Stein Mart boosts brand awareness through television and radio ads. Online, the company taps digital media vehicles, such as online advertising and social networking sites the likes of Facebook and Twitter. The company has relaunched a website designed to generate more online sales and store traffic.
Stein Mart has maintained growth at a steady if somewhat slow pace. In 2016 (ended January), sales inched up 3% to about $1.3 billion from 2015. That 3% matches the company's five year average revenue increase. For 2016, the company mustered just a 1% increase in same-store sales on increases in average units-per-transaction and average-unit retail prices, but offset the fewer transactions.
Profit dropped 12% to about $24 million in 2016 because of higher markdowns that resulted from inventories of fall fashions that didn't move as expected. Money spent for store expansion and planned pay increases served to sap net income.
Cash flow from operations slid to $38 million in 2016 from $52 million in 2015 because of lower net income adjusted for non-cash charges and investments in inventory and changes in accounts payable ($23 million higher in 2016 from 2015).
While the company is taking a conservative approach to growth, Stein Mart aims to maintain its presence in the southeastern US and in Texas. During fiscal 2016, the retailer planned to open 12 stores, relocate two stores, and close one store. The new stores are expected to increase sales an estimated 4% above its comparable store sales increases for the year.
Stein Mart typically targets a well-dressed woman age 35 to 60 who boasts a higher than average income. The company tries to occupy the niche between mall-based department store that charge higher prices and off-price chains which offer lower prices to customers.
Stein Mart is making several adjustments in order to attract more shoppers to its stores. The company is providing more regional fashion such as stocking more colorful, casual dresses in Florida and more muted and formal women's wear in California. Stein Mart is stocking more athletic-leisure wear (sometimes referred to as athleisure) to partake of the trend toward donning active but comfortable wear in non-athletic situations. Furthermore, the company wants to find more "special items," unexpected goods at lower prices that lend a "treasure hunt" aspect to Stein Mart shopping.
Like most retailers not named Amazon.com, Stein Mart has struggled to cultivate online sales. To remedy that situation, the company launched a redesigned website during the year. It offers a cleaner interface, easier navigation and checkout, and can be used on phones as well as computers. The retailer has room to grow with online sales, considering that less than 1% of its 2016 revenue came from its website.
In a move that could offer more incentives to customers and increase loyalty, Stein Mart, working with Synchrony Financial, began offering a private-label credit card. The deal also offers a better financial return for the company that its MasterCard arrangement with Synchrony, which remains in place.
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.
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.