Stein Mart 2014 Annual Report Download - page 7

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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. All Stein Mart Credit Card
holders are members of our Preferred Customer Card program.
Stein Mart Credit Card holders (co-branded MasterCard and private label cards) receive advance notice of sales events and special
promotional offers including Extra Savings Events which occur periodically throughout the year and provide incremental savings on
purchases made with the Stein Mart Credit Card during these events.
Stein Mart Co-branded Credit Card holders also participate in the credit card rewards program, which provides for an incentive in the form
of reward certificates based on their cumulative purchases made on the credit card.
COMPETITION
Our primary competitors are department and specialty stores, as well as conventional off-price retail chains. From our customers
perspective, we believe we differentiate ourselves from department stores and specialty stores with our (i) everyday low pricing, (ii)
convenient locations in shopping centers, and (iii) assortments that are more selective than department stores and more varied than
specialty stores. We believe we differentiate ourselves from typical off-price retail chains by offering (i) primarily current season first-quality
merchandise carried by better department or specialty stores, (ii) a stronger merchandising statement,consistently offering more depth of
color and size in individual stock-keeping units, (iii) merchandise presentation and customer service more comparable to upscale retailers
and (iv) competitive price levels.
DISTRIBUTION
Our logistics network (supply chain) consists of consolidation centers (CCs) located in the Atlanta, Los Angeles and New Jersey areas,
and store distribution centers (SDCs) located in the Atlanta, Dallas, and Los Angeles areas. Approximately 55% of the vendor shipments
are aggregated at the CCs and then shipped to the SDCs with the remaining 45% moving directly from vendors to SDCs. The SDCs
receive, check and prepare the merchandise to ensure it is floor ready for our stores. The SDCs are automated and virtually all of our
vendors are electronic data interchange (EDI) capable so we are able to cross-dock a high percentage of our receipts. Store deliveries
are made by contract carriers once or twice a week depending on location and store volume. The New Jersey CC is the only facility
managed by a third-party logistics provider.
EMPLOYEES
As of January 31, 2015, our work force consisted of approximately 11,300 employees (5,600 40-hour equivalent employees). Each of our
stores employs an average of 39 persons. The number of employees fluctuates during the year based on the particular selling season.
SEASONALITY
Our business is seasonal. Sales and profitability are historically higher in the first and fourth quarters of the fiscal year, which include the
spring and holiday seasons.
TRADEMARKS
We own the federally registered trademark Stein Mart®, together with a number of other marks used in conjunction with our private label
merchandise program. Management believes that our trademarks are important, but, with the exception of Stein Mart®, not critical to our
merchandising strategy.
AVAILABLE INFORMATION
Copies of our annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K, and any
amendments to those filings are available, free of charge, on our investor relations website at http://ir.steinmart.com (click on SEC
Filings). Also available free of charge on the investor relations website are the charters for the Audit Committee, Compensation
Committee, and Corporate Governance Committee, as well as the Code of Conduct, Corporate Governance Guidelines, Articles of
Incorporation and the Conflict Minerals Policy (click on Charters & Documents). Paper copies of these items are available free of charge
upon request by writing Stein Mart, Inc., 1200 Riverplace Boulevard, Jacksonville, FL 32207, Attention: Investor Relations.
ITEM 1A. RISK FACTORS
Our results of operations and financial condition can be adversely affected by numerous risks and uncertainties. In evaluating the
Company, the risks and uncertainties described below and the matters described in Forward-Looking Statementsshould be considered
carefully. Should any of these risks actually materialize, our business, financial condition, and future prospects could be negatively
impacted.
Our sales and operating results are affected by consumer sensitivity to economic conditions. The retail apparel business is
dependent upon consumer spending and, as a fashion retailer, we rely on the expenditure of discretionary income for most, if not all, of our