ICR XCHANGE January 12, 2015

Transcription

1 ICR XCHANGE January 12, 2015

2 Safe Harbor Statement The following information contains forward-looking statements. These forward-looking statements are based on Management s current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events. These statements are subject to risks, uncertainties, assumptions, including those discussed in the Risk Factors section of our reports filed with the Securities and Exchange Commission, and other important factors, many of which are outside Management s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. All forward-looking statements are based on information available to Management on this date, and Gordman Stores, Inc. assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Our Concept Gordmans is an everyday, value-priced department store 3

4 Every day pricing up to 60% off department stores prices Our Concept 4

5 Our Concept Department store brands and assortment 5

6 v Fun & Friendly shopping atmosphere 6

7 Our Core Guest OUR CORE GUEST Working Mom Age Mom shops for entire family Missy Junior Kids Men s Home decor Larger than average family $74k average household income Value sensitive Price conscious Where she shops Kohls JCP T.J. Maxx 7

8 First Impressions and Opportunities 8

9 Breakout Sessions Coquina Ballroom Table G-2 11:30 a.m. 3:00 p.m. 9

10 2015 Overview Strategy Leverage new Chief Merchandising and Chief Marketing Officers to develop assortments tailored to our guest profile, introduce new brands and refine our marketing message to highlight merchandise and value. Realign business to more closely follow an EDVP business model by limiting promotions and introducing a higher volume of special buys. Growth Launch ecommerce in mid-2015 to take advantage of guest online shopping behavior. Apply learnings in Misses to grow comp sales in other businesses. Open new stores at a modest pace and develop alternative store configurations. Utilize loyalty program to drive more frequent visits and higher transactions from existing loyalty guests, as well as continue to increase the loyalty guest database. Operations Improve efficiency of supply chain surrounding the opening of a second distribution center in Maintain current average store inventory levels and drive sales with fresh receipt flow. Allocate higher percentage of markdowns to permanent (clearance), in-season markdowns, rather than promotional activities. 10

11 Our Strong Guest Relationship Our guest shops us frequently Frequency % At least monthly 38 Every 2 months 21 Every 3 months 17 Every 4 12 months 24 The monthly shopper (38%) accounts for 55% of our sales. We have strong purchase completion. 87% of guest visits result in a purchase. We have high guest satisfaction. 94% of our guests are thrilled or very satisfied with their purchase. We have substantial drawing power. On average, our guests travel 18 minutes to our store. 34% of our guests travel greater than 25 minutes. 11

12 Key Marketing Strategies Leverage loyalty program to drive traffic 3.6 million active loyalty guests. Currently, loyalty members account for 65% of sales. Loyalty member transaction is 18% higher than non-loyalty transaction. Frequent loyalty communication via direct mail, and mobile. Sharpen our marketing message to focus on value Communicate our value advantage through broadcast media and print. Exploring the use of an outside advertising agency to create a value campaign. Supplement our everyday value marketing message with promotional events focused around key natural shopping periods Communicate the event promotional offer via broadcast, ROP, , direct mail and mobile. 12

13 Merchandising Strategy Branded merchandise for the entire family: Womens/Juniors (31%) Home Décor and Essentials (26%) Accessories/Fragrances (15%) Mens/Young Mens (13%) Childrens (10%) Shoes licensed business (5%) Our guests cross-shop all departments. 40% of apparel buyers also make purchases in home. Likewise, 40% of home buyers also make purchases in apparel departments. Everyday selling price up to 60% off department store retail prices. Limit promotions to natural shopping events (i.e. Black Friday, Christmas). 13

14 Merchandising Opportunities Hired a strong seasoned Chief Merchandising Officer as of January Evolve the business model to take advantage of the everyday value proposition. Reduce deflationary use of coupons. Take permanent markdowns timely sell clearance inventory inseason. Budget a larger portion of markdowns as permanent vs. POS. Increase inventory turn, and therefore, flow of receipts. Market the everyday value concept in-between natural shopping events. Save promotions for natural shopping events such as Easter, Mother s Day, Father s Day, BTS, etc. Increase the sense of urgency to shop in-between natural shopping events. Infuse more limited quantity special/off price buys into the assortment. Market our value proposition No need to wait for a department store sale. 14

15 Merchandising Opportunities Execute better assortments Rebalance our fashion and fashion basic offerings. Continue to build the proper relationship of good/better/best assortments. Exit seasonal businesses on a timely basis. Leverage 2014 Accomplishments In Q2 2014, we right-sized our inventory investment to let new receipts drive sales and to better transition seasonal clearance inventory. In Q3 2014, we opened a second distribution center to improve merchandise flow to stores and support new store expansion. In 2014, we started planning and investing in the infrastructure for a mid-2015 ecommerce launch. 15

16 2014 geographic footprint Minot Grand Forks Fargo 1 Boise Ogden Salt Lake City (2) Denver (4) Wausau Green Bay Appleton (2) Rapid City 1 Mankato Milwaukee Sioux Falls Madison 1 Sioux City Waterloo 1 Chicago (3) Des Moines (3) Rockford (2) Cedar Rapids 1 Fremont Coralville Moline Mishawaka Grand Island Valparaiso Davenport Omaha (4) Fort Wayne Council Bluffs Peoria Lincoln Normal St. Joseph Springfield Lafayette Colorado Springs Topeka Wichita (2) St. Louis (5) Champaign Evansville Clarksville Lexington (2) Springfield Albuquerque (2) Tulsa (2) Oklahoma City (3) Rogers Little Rock Memphis (2) Southaven 1 16

17 Our new store model generates strong returns (dollars in thousands) Store Size 50,000 square feet Leasehold and fixtures $4,200 Inventory, net of payables 524 New Store Investment Pre-opening expenses 470 Total initial investment $5,194 Less: Landlord contribution 3,864 Net initial investment $1,330 Store sales $6,500 - $7,500 Unit Economics 4-Wall contribution $708 - $1,056 Cash-on-cash return 53% - 79% Payback period yrs 17

18 Q Updated Guidance Sales Comp store sales $ $204.0M Low single digit decrease EPS $ $