(Carl Cronan is editor of Real Estate Florida.)
JACKSONVILLE, FL-Positive cash flow will be the mantra for Stein Mart Inc. this year as the locally based women's discount fashion retailer seeks to expand its brand while offering greater value to customers. The national chain plans to open only two stores throughout 2009, while closing 10 to 13 underperforming locations and negotiating rent reductions with current landlords.
"We believe we have created a realistic plan for operating our business," David Stovall, Stein Mart's first-year president and CEO, said during an earnings teleconference Thursday morning after the release of the company's fourth-quarter and full-year financial results. Stein Mart posted a net loss of $71.3 million for the fiscal year ended Jan. 31, compared to a $4.5-million loss in 2007, including a loss of $56.2 million in its fourth quarter from $12.1 million in the same period a year earlier.
Full-year results included non-cash pre-tax charges of $25.4 million for asset impairment and store closing charges. Stein Mart shuttered 10 underperforming locations over the past year while opening six new stores and relocating one. Company executives cited a 12% decline in comparable store sales last year as more customers chose to buy separate pieces rather than complete outfits.
At the same time, the company states that it increased cash provided by operations to $19.4 million last year from $17.8 million in 2007, an increase of nearly 10%. It also said it decreased year-end inventories 20% per average store.
Stein Mart, whose stock value is currently hovering just above $1 per share on the Nasdaq Exchange, previously announced plans in January to cut 200 positions including a dozen personnel at its Jacksonville headquarters and paring assistant manager positions. Those moves and others are expected to save $40 million to $50 million this year, followed by $20 million to $25 million in 2010, according to Stovall.
Meanwhile, Stein Mart aims to capitalize on recessionary pricing from its suppliers as a way to pass savings along to existing and new customers. "The reality in the current marketplace is that there is an increased availability of high-quality, very desirable merchandise at extremely attractive prices," Stovall said. "We're taking advantage of these opportunities and passing that value along to our customers."
Stein Mart is also launching a new brand-building television advertising campaign in local markets and cable channels geared toward women. The chain has 278 stores nationwide.
Although it has faced its greatest challenges in Florida and the Southeast, Stovall told analysts that Stein Mart is jump-starting its business in South Florida: "We have seen some stabilization there and feel hopeful that the market has bottomed out for us."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
