Rue 21 2012 Annual Report Download - page 12

Merchandising and Sourcing
Our flexible, fast fashion model allows us to quickly identify and respond to trends and bring the newest, tested
concepts and styles to our stores. We strive to offer a compelling product selection for our customers by regularly
editing our merchandise assortment to reflect key fashion trends and by shipping new merchandise to our stores
multiple times per week.
Merchandising
Our merchandise buying teams, led by our General Merchandise Manager and Merchandising Directors, are
responsible for identifying emerging fashion trends, reviewing merchandise lines from new and existing vendors,
and selecting merchandise for our stores that will resonate with our customers. The merchants are responsible for
developing seasonal strategies, as well as buying, editing and pricing our merchandise on an ongoing basis based on
customer demand. Our marketing, product development and visual teams work with the merchandise team to
coordinate color and trends across the product assortments to ensure trend right merchandise that encourages
multiple unit and outfit purchases. Our merchants are dedicated to consistently delivering high quality fashion
assortments at every day great value.
Sourcing
We do not own or operate any manufacturing facilities. We purchase all of our merchandise from a network of
domestic based importers and domestic vendors. We believe our lack of dependence on any one vendor enhances
our flexibility and minimizes product risk. In addition, we believe our long-term relationships with many of our
vendors enable us to benefit from quick deliveries as well as competitive pricing.
Although all of our vendors are based in the United States, the majority source our products from overseas. Our
vendors are responsible for importing products. We do not directly import any of our merchandise or exercise
control over manufacturing of our merchandise. A small portion of our merchandise is manufactured domestically.
Our vendors are required to sign our vendor agreement that incorporates a comprehensive vendor compliance
manual, which is updated regularly. The vendor compliance manual details our packing, shipping and production
requirements primarily related to tagging and labeling, as well as our legal requirements, professional and ethical
standards and payment terms. We typically transact business on an order-by-order basis. Each purchase order also
incorporates and references the requirements, standards and terms described in the preceding sentence. The purchase
orders, vendor agreement and vendor compliance manual all are designed to ensure that our vendors operate in
compliance with all applicable rules and regulations, including labor, customs and consumer protection laws. We do
not control or audit the vendors that produce the merchandise we sell. We do reserve the right to conduct random
testing of products and use a third party resource to conduct such random testing on designated categories of items
to further address our concern for customer safety. Our national freight consolidator ships to our distribution facility
in Weirton, West Virginia from both the west coast and east coast.
Marketing and Advertising
We believe that girls and guys rely heavily on the opinions of their peers to determine whether a retailer is
relevant to them. As a result, we do not depend on conventional advertising, but instead employ a viral approach to
marketing that is designed to capture the interest of our customers and drive them into our stores through the use of
the internet and social media channels. For example, product knowledge, trend statements and fashion blogs are
posted daily through Facebook, Twitter and YouTube. Our rue21.com website reinforces our brand image and
allows us to reach our customers in a fun and interactive environment. Website promotions and contests are an
added incentive to motivate teens to share their voice. In addition, email campaigning is used to send “e-blasts” and
coupons. The “e-blasts” highlight key trends, new products and promotional events to drive our customer back to
our stores.
We use our website and social networking to promote our brand image and employ a viral marketing approach
to building brand awareness and customer loyalty. We often initiate marketing efforts in concert with the local
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