Stein Mart 2014 Annual Report Download - page 5

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3
PART I
ITEM 1. BUSINESS
OVERVIEW
Headquartered in Jacksonville, Florida, Stein Mart is a national retailer offering the fashion merchandise, service and presentation of a
better department or specialty store. Our focused assortment of merchandise features current season, moderate to better fashion apparel
for women and men, as well as accessories, shoes and home fashions, all offered at prices competitive with off-price retail chains. Begun
in the early 1900s as a single store in Greenville, Mississippi, we operated 270 stores in 30 states and an Internet store as of January 31,
2015. Stein Mart, Inc. became a Florida corporation in 1992. Prior to 1992, Stein Mart, Inc. was incorporated in Mississippi.
As used herein, the terms we,our,us,Stein Martand the Companyrefer to Stein Mart, Inc., a Florida corporation, and its wholly-
owned subsidiaries.
KEY STRATEGIC OBJECTIVES
Our mission is to provide current season, first-quality fashion apparel, shoes, accessories and home fashion merchandise at prices
comparable to off-price retail chains in a convenient, attractive, easy-to-shop location. We believe our success and future growth will
depend on the consistent execution of the following:
xHaving a desirable, current season assortment of designer, brand name, exclusive and proprietary fashion apparel, accessories
and home fashion merchandise,
xSourcing a wide range of key brands and maintaining strong partnerships with the vendors representing those brands,
xOffering everyday low prices on fashion merchandise through buying methodologies and low cost operations,
xAttracting repeat and new customers through marketing and advertising programs,
xHaving an attractive store appearance, appealing merchandise presentation and on-demand customer service, similar to a
department or specialty store, and
xMaintaining current and opening new locations in regional, community and neighborhood shopping centers serving a more
affluent customer.
TARGET CUSTOMER
Our target customer is a 35-65 year old woman who is both style conscious and value seeking. She is typically married and college
educated. She may be multi-cultural, works at least part-time in a professional position and has above-average household income.
MERCHANDISING, PURCHASING AND PRICING
Our fashion assortment is driven primarily by seasonal fashion trends and a focus on name brand and designer merchandise
complemented by a select program of private label and proprietary/exclusive merchandise. In 2014, approximately 10 percent of our sales
were from private label or proprietary/exclusive merchandise. We merchandise our stores based on individual store selling characteristics,
seasonal buying fluctuations and regional preferences while maintaining mostly consistent assortments from store to store.
Our merchants purchase products from approximately 1,200 vendors. One of our vendors accounted for approximately 5 percent of our
total purchases during 2014. We buy a majority of our merchandise at the same time and from many of the same manufacturers as
traditional department/specialty stores although we generally do not require the same level of front and back-end vendor concessions,
such as advertising allowances, return privileges and markdown allowances, which are common and significant in the department store
industry. As a result, we believe that our buyers are able to negotiate more favorable upfront pricing terms from vendors. We also
purchase merchandise opportunistically when we believe a combination of the product and the price makes it a compelling addition to our
assortment. In both instances, we reflect our savings in our pricing which passes on to our customers through everyday low pricing
targeted to be competitive with off-price retail chains.
Our shoe department inventory is exclusively supplied and owned by DSW, Inc. (DSW). DSWs buyers determine each seasons fashion
footwear assortment. We operate the shoe department and receive a percentage of Net Revenue in accordance with a supply agreement
(the Supply Agreement). Commissions from this leased department are included in net sales reported in our consolidated statements of
income.