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Table of Contents
PART I
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
1900’s as a single store in Greenville, Mississippi, we operated 262 stores in 29 states as of January 28, 2012.
As used herein, the terms “we”, “our”, “us”, “Stein Mart” and the “Company” refer 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, 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:
TARGET CUSTOMER
Our target customer is a 35-55 year old woman, sometimes called a “missy customer,” who is both fashion-conscious and value-seeking.
Proprietary research has shown she is most likely to have a higher than average household income, at least some college education, and if she is
employed, she typically has a professional or paraprofessional occupation.
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 2011, approximately 9 percent of our sales were from private label or
proprietary/exclusive merchandise. The majority of merchandise is consistent from store to store, with exceptions based on individual store
selling characteristics, seasonal delivery fluctuations and regional preferences.
Our merchants purchase products from approximately 1,300 vendors. None of our vendors accounted for more than 5 percent of our total
purchases during 2011. 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”). DSW’s buyers determine each season’s fashion
footwear assortment. We operate the shoe department and receive a percentage of net revenue in accordance with a supply agreement (the
“Supply Agreement”). Shoe department sales are not included in net sales reported in our Consolidated Statements of Income. Amounts
received under the Supply Agreement are included in Other income.
3
ITEM 1. BUSINESS
•
Having a desirable, current-season assortment of designer, brand name, exclusive and proprietary fashion apparel, accessories and
home fashion merchandise
•
Sourcing a wide range of key brands and maintaining strong partnerships with the vendors representing those brands
•
Offering everyday low prices on fashion merchandise through buying methodologies and low
-
price cost structure
•
Attracting repeat and new customers through marketing and advertising programs
•
Having an attractive store appearance, appealing merchandise presentation and on-demand customer service, similar to a
department or specialty store
•
Locations in regional, community and neighborhood shopping centers serving a more affluent customer