Maurices Product Performance:
- The firm maximized post-holiday gift card business by satisfying more guests as commitment to like sale concept shops along with the health ownership of spring product offered the customer variety and newness.
- Positive results came from continued strength within well established knit top and denim categories as well as strong performance from the new developing wear at work and lounge businesses.
- The core casual collection was driven by hoodies, longer length tops, layering pieces and screen tees paired with the perfect five pocket jean in darker washes.
- The dressy collections featured two and three color geometric patterns, breath of layering piece options and solid ribbed sweaters merchandised back to the strong dress pant offering.
Disappointments included jewelry, embellished holiday looks and heavy weight sweaters.
- The plus size business continues to develop and meet expectations with sales drivers being fashion knit tops, five pocket jeans and casual bottoms.
- Looking forward to the spring selling season, the assortment will be driven by variety, with the casual assortment ranging from fun and flirty fashion tops to denim to cool comfort in shades of brown, turq, red and yellow paired with eco friendly screens and plaid shorts.
- The dressy collections will offer both rich, luxurious colors with touches of ruffle and lace as well as the simplicity of black and white patterns matched to black bottoms.
Marketing Initiatives:
- The firm sent out three major direct mail pieces that anniversaried the same events last year generating strong response rates but lower ADS due to higher markdowns.
- The firm also reallocated money to substantially increase quantities mailed and tested different formats for the holiday look plus a supplemental holiday postcard to incremental segments within the database.
- It incorporated new, more aggressive offers.
Going forward, focus is to drive sales through two key direct mail pieces, the spring sale postcard and the spring fashion book with a supplemental postcard and gift with purchase.
- At Maurices, the firm had one primary mailer as well as a supplemental mailer to the best Maurices’ credit card customers and had implemented some new customer contact strategies like birthday cards and reactivation mailers.
- Market share for the Maurices’ credit card was flat at just over 28% and gift card sales redemption was strong up almost 25% over last year.
Fiscal 2008 Outlook:
- Capital expenditures are estimated at $73 million with $40 million allocated for the Dress Barn brand and $33 million allocated for the Maurice brand, primarily for new store growth, remodels and new systems.
- The firm will continue to take a conservative approach to plan the business while maintaining a balance between the ongoing challenges of the consumer market and long term growth opportunities.
- Inventory levels for the new spring season are being planned for Dress Barn stores to decrease in the mid-single digits over the prior year and on an average store basis a similar decrease.
- At Maurices average store inventories are also being planned down in the mid to low-single digits compared to last year with comparable store sales estimated to increase in the mid-single digits.
Key questions and answers from the second quarter earnings call conducted by The Dress Barn Inc. (DBRN) on February 27, 2008.
Gary Giblen (Goldsmith & Harris):
Are accessories and jewelry growing more or less as you’re aiming to or is that recession impacted?
David R. Jaffe: During times when there is a little bit of an economic downturn that those businesses are gaining importance and that is basically the way we are planning it for the spring season. We are focusing on growth in those categories for spring in Dress Barn stores.
Gary Giblen (Goldsmith & Harris):
Is competitive activity rational or are people panicking because of the consumer and doing any unusually crazy promotions?
David R. Jaffe: We saw some craziness during the holidays but for good cause. It was really tough and a lot of us had too much inventory that we just had to clear out. What we are seeing at this point going into spring with everyone having fresh inventories seems to be much more rational, most of the retailers seem to have their inventory issues under control and with the early Easter and with hopefully a little good weather maybe the business will stabilize a little bit.
Janet Kloppenberg (JJK Research):
Do you think that maybe sales are better here because the build to Easter is earlier than it was last year at this time?
David R. Jaffe: No, because we are not yet seeing the build to Easter yet.
Janet Kloppenberg (JJK Research):
Given the tough comparison coming up in March, had you built in any new promotions or marketing events to maybe get you through that with a strong trend?
Lisa Rhodes: Yes, we are up against a strong March. We ran two mailers, one in February and one in March. This year based on the Easter shift we did not run the February one, we are anniversarying it with a BOGO which allows us to make the March mailer about 80% larger than it was a year ago.
Janet Kloppenberg (JJK Research):
Are there any opportunities for rents to look more attractive or locations to be offered to you that you did not think you could previously attain?
