Big Lots 2012 Annual Report Download - page 106

26
Canadian Segment
Our Canadian segment is focused on broadline closeout retailing and we have implemented merchandising
strategies similar to those in our U.S. segment. From a merchandising perspective, our assortment is fairly
similar to our U.S. segment, while the percentage of each category varies based on seasonality, availability
of product, and the demand of the Canadian consumer. We believe the merchandising categories of goods
sold in our U.S. segment have been core to our success, and consumers in Canada are responding to our
value proposition. Additionally, many of the vendors with whom we have strong relationships in the U.S. also
have Canadian operations in need of an established closeout partner; therefore, we believe we have access to
sufficient merchandise flow in order to execute our strategy.
During 2013, we will be focused on: (1) continuing to improve merchandise quality and adjust merchandise
mix based on consumer demand and testing; (2) testing potential new marketing strategies and options; and
(3) introducing the Big Lots brand to Canada by opening two to three new stores while also rebranding a small
number of existing Liquidation World or LW stores under the Big Lots name.
Discontinued Operations
We continue to incur an insignificant amount of costs on the 130 stores we closed in 2005 that are classified as
discontinued operations. We also report certain activity related to our prior ownership of the KB Toys business
in discontinued operations. See note 13 to the accompanying consolidated financial statements for a more
detailed discussion of all of our discontinued operations.
2012 Compared to 2011
U.S. Segment
Net Sales
Net sales by merchandise category, in dollars and as a percentage of total net sales, and net sales change in
dollars and percentage in 2012 compared to 2011 were as follows:
2012 2011 Change
(In thousands)
Furniture...................... $ 936,463 17.9% $ 883,341 17.2% $ 53,122 6.0%
Consumables .................. 870,098 16.6 848,492 16.5 21,606 2.5
Home ........................ 810,133 15.4 799,494 15.5 10,639 1.3
Food......................... 742,267 14.1 723,280 14.1 18,987 2.6
Seasonal...................... 707,418 13.5 683,498 13.3 23,920 3.5
Electronics & Other ............. 602,954 11.5 607,606 11.8 (4,652) (0.8)
Hardlines & Toys............... 575,939 11.0 594,453 11.6 (18,514) (3.1)
Net sales ................... $5,245,272 100.0% $5,140,164 100.0% $105,108 2.0%
In the fourth quarter of 2012, we realigned select merchandise categories to be consistent with the realignment
of our merchandising team and changes to our management reporting. Prior to the fourth quarter of 2012, we
reported sales of our toys, books and sporting goods departments in the Play n’ Wear category. We moved the
toys, books and sporting goods departments out of the Play n’ Wear category and repositioned them in the
Hardlines & Other category. We also moved the results of certain large closeout deals that are typically acquired
through our alternate product sourcing operations out of the Hardlines & Other category and repositioned them
in the Play n’ Wear category. We subsequently renamed our Hardlines & Other category to Hardlines & Toys
and renamed our Play n’ Wear category to Electronics & Other. Our Consumables category was also separated
into a Food category and a Consumables category. The Consumables category now contains our health
and beauty care, housekeeping supplies, household chemicals, paper products, pet, and home organization
departments, while the Food category contains our various food and beverage departments. Fiscal 2012 and
2011 sales results have been reclassified to reflect this realignment.