Big Lots 2008 Annual Report Download - page 5

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Since launching our WIN (What’s Important Now) Strategy over
three years ago, we have accomplished what we set out to achieve
and more. That’s called accountability. We have taken a business
that was marginally profitable to new heights with record operating
profit dollars and record EPS performance. We have executed to
a new strategy through improved merchandise offerings, better
brands and values, a leaner and more productive real estate
portfolio and a more efficient operation with a lower overall cost
structure both in terms of dollars and as a percent of sales.
I couldn’t be more proud of this organization and all that has been
accomplished in a very short period of time to position our business
alongside some of the most successful retailers in the marketplace.
■A Record Year for BIG
Like most businesses, the global economic crisis kept us from performing as well as we could have. However,
I have stated on a number of occasions that if we improved our merchandise offering, made good real estate
decisions, and relentlessly attacked our cost structure, good things could happen for our business. Pure and
simple, we remained focused on our strategy and what was within our control:
NWe offered the customer tremendous value, new brands, and better quality.
NWe managed our inventory wisely and generated record turnover.
NWe controlled our costs to the lowest expense rate (% sales) in our history.
NWe invested for the future of the business by completing our point-of-sale register system rollout and
beginning the process of designing and installing a new core IT infrastructure through SAP®
.
NBottom line: 2008 was a record year for operating profit dollars and EPS (earnings per diluted share).
■Recalibrating a Successful Formula
We have built a solid foundation and business model for the company, and we are well positioned for fiscal 2009
and the future. The key elements of our WIN Strategy (Merchandising, Real Estate, and Cost Structure) will remain
the same, although some of the strategies and initiatives will be different. Change is critical in retailing. If you are
not changing, you are standing still, and if you are standing still, you are losing ground to your competition and
losing relevance with your customer.
Merchandising
Our customers have told us they want unmatched value and better quality goods from Big Lots, and it’s our goal
to deliver both.
NOur in-store presentation and advertising will be more focused on the categories our customers love most
(Consumables, Seasonal and Furniture) while we test and alter strategies in other areas where sales have been
challenging (Home and Toys).
NBecause of the struggles of other retailers or manufacturers, we anticipate more deals will be available to us at
savings we can pass on to our customers.
NOngoing improvements in inventory management and product turnover will ensure an exciting and
ever-changing assortment for our customers.
DEAR SHAREHOLDERS
Steven S. Fishman, Chairman, CEO and President
NBig Lots, Inc. 2008 Annual Report N