Stein Mart 2012 Annual Report Download - page 7

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The following table reflects the percentage of our sales by major merchandise category, including shoe department sales, for the fiscal
years indicated:
2012 2011 2010
Ladies’ and Boutique apparel 45% 45% 46%
Ladies’ accessories 12% 13% 13%
Men’s 20% 20% 20%
Home 12% 11% 11%
Shoes 8%8%7%
Other 3% 3% 3%
100% 100% 100%
LOCATIONS, GROWTH STRATEGY AND STORE APPEARANCE
On February 2, 2013, we operated 263 stores in 29 states. Our stores are located in the Northeast, Midwest, Southeast, Texas and the
Southwest. We are most fully concentrated in the Southeast and Texas where 184 of our stores are located. Most locations are in
neighborhood, community and regional shopping centers frequented by a more affluent customer. Our optimal co-tenants within these
shopping centers cater to a similar target customer and include highly-frequented retail formats such as other apparel retailers, higher-end
grocers and restaurants. All Stein Mart locations, including the corporate headquarters, are leased.
We are selectively seeking properties that strengthen our portfolio of stores in current markets. We utilize regional tenant representative
brokers to help us identify potential sites for new or relocated stores. New store decisions are supported by independent sales forecasts,
and approved by a real estate committee made up of senior level executives.
Our typical store is currently approximately 35,000 gross square feet with a racetrack design, convenient centralized check-out, and
individual dressing rooms. We display merchandise in lifestyle groupings of apparel and accessories, which we believe enables the
customer to locate desired merchandise in a manner that encourages multiple purchases. We seek to create excitement in our stores
through the continual flow of fashion merchandise, targeted sales promotions, store layout, merchandise presentation, and the quality,
value and depth of our merchandise assortment. Our newer stores are approximately 32,000 gross square feet with the reduction from our
past stores being in smaller backrooms that can be accommodated by our newer distribution processes.
In 2010 we began selling selected merchandise offerings on the internet. This expanded to additional product offerings for 2011 and 2012.
During 2012, we temporarily ceased selling merchandise on the internet as we realized we needed a world-class platform provider to
maximize this important channel of business for us. Beginning in late 2013, we anticipate a relaunch of the internet site to sell
merchandise. Internet sales in 2012, 2011 and 2010 amounted to less than 1% of sales.
CUSTOMER SERVICE
Our stores offer many services typically found in better department or specialty stores, such as a liberal merchandise return policy,
merchandise locator service, a Preferred Customer program, co-branded credit card and private label credit card programs, and electronic
gift cards. Each store is staffed with a number of sales associates to provide on-demand customer service. Our stores have their own
Boutique, generally staffed by specially-recruited associates who typically work one day a week. We believe this staffing approach adds
credibility and fashion integrity to the department.
MARKETING
Our marketing efforts are focused on deepening our relationship with our best customers in order to increase our share of her spending.
We engage in periodic market research, including accessing our proprietary customer panel, to identify how best to reach each of these
audiences and, in consultation with our outside advertising and direct-marketing agencies, we adjust our marketing focus accordingly.
Our advertising stresses upscale fashion merchandise at discount prices. We utilize a combination of full-color circulars (both inserted in
newspapers and mailed directly to homes), direct mail, newspaper run of press (ROP) advertising, and email to distribute our sales
promotion messages. To reach a broader audience, increase brand awareness and drive promotional events, we use both television and
radio advertising. We utilize digital media including online advertising and have a presence on social networking sites, including Facebook
and Twitter.
Our Preferred Customer Card program is an important marketing tool. Preferred Customer Card customers receive preview copies of
select circulars mailed to their home, members only shopping days, birthday discounts and special email announcements. This program
provides useful database information regarding customer preferences, habits and advertising receptivity.