"Our fourth quarter revenues increased approximately 53%, and for the year, sales were up 57%... And even though we achieved a strong Q4 comp increase, we still believe there was unmet demand across all product lines in our stores and E-commerce channel...
In E-commerce, we achieved our goal of 10% of total sales in the fourth quarter. And even though we will have a short-term disruption to this business as we re-launch our site at the end of the first quarter, we project staying at 10% in 2011, just our second full year in the E-commerce business. And we have set a new midterm target of 15% of sales...
Given we are still learning a lot about E-commerce and have been perpetually under inventoried on our site, we know that we are still at the early stages and see a tremendous opportunity to grow this channel. Also adding to our total sales growth for the fourth quarter were 12 stores we opened in the U.S. during 2010, which were performing close to the average of all our U.S. stores. We believe our expanded showroom strategy was a major driver of this success...
So to summarize 2010, the year was characterized by strong guest demand for our product, limited markdowns, multifaceted top line growth and leveraging costs while still making important investments, all netting to record profitability...
We believe that our overall strategy heading into 2011 is more dynamic than ever. It includes driving organic revenue growth, increase supply chain capacity and capability, continued focus on our in-store guest experience, continued innovation in yoga and run, grassroot community and a digital strategy to expand our online community presence, strategically placed showrooms converting to stores, resulting in the opening of up to 30 new stores, and the launching of our new E-commerce platform....
Moving into the first quarter of 2011, I want to highlight our inventory position and our E-commerce transition. First, the exceptionally strong sell-through of our Q4 product left us under inventoried to service our Q1 demand. In addition, as each new delivery arrives, it has been selling much faster than planned. Our new product deliveries are now weighted towards April, beginning the replenishment of our inventory position.
Next, as previewed last year, we are transferring our E-commerce platform from our current third-party vendor to our in-house ATG platform. This is a complex project that requires significant IT infrastructure changes and integration of multiple service vendors to a new site. It also requires a physical move of inventory from the third-party supplier to our own U.S. DC. The date of the official transfer is April 15th. To facilitate the cutover from our vendor systems to ours, the entire site will be down for a few hours so we can test new site integration. This will occur during the evening hours of April 14 to early morning of the 15th.
After launch, we will be introducing our new summer product line. The plan is to slowly bring the spring inventory down in the outsourced facility to minimize the amount that needs to be counted, packed and shipped, and ensures we will have a full inventory to support the new site. We have a guest communication strategy in place so the move is transparent, and our guests are supported during the transition. While we will see a temporary sales decline in the new E-commerce channel in Q1, we anticipate a full sales recovery in Q2 with the launch of the new site where we will achieve a higher margin...
3 comments:
So excited about the new web site. At least they are doing it in house. I hope its like the Victoria Secret or Nordstrom web site. Its good that they are acknowledging there is lack of inventory on the online store and here's hoping the web site and the inventory online improves tremendously.
I am excited about the new web site. But my concern is if they find an item for us, the stores have told me in the past they will not ship to individuals.
What plan do they have for that?
Personally I prefer the stores not to ship to individuals. That way the store will not look empty for people walking into stores because people are calling up to buy them via a phone call. But I know a few stores do that.
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