With its stock price dropping below $1 five months ago and several major retailers going out of business, many people wondered about the future of Stein Mart Inc.
However, the top executives of the Jacksonville-based retail fashion chain say they're on the right path to turning around a slumping sales trend.
“We've made dramatic changes and improvements to our business,” CEO Hunt Hawkins told shareholders Tuesday at the company’s annual meeting at its Southbank headquarters office.
Hawkins became Stein Mart’s permanent CEO and MaryAnne Morin joined the company as president last year. They implemented changes to brighten the company’s outlook.
Some of the changes are not apparent to customers, such as better inventory management which is improving profit margins.
“We've strengthened inventory management and we can't talk about it enough,” Morin said.
But Morin also told shareholders about changes made in stores to improve the shopping experience.
That includes removing jewelry cases and grouping brands together, creating a better flow for customers going through the store, she said.
“We're trying to make everything easier for the customer,” she said.
Stein Mart is taking steps to build up its e-commerce business, including a ship-from-store service which allows the company to ship merchandise to customers from its local stores.
“Now we're at the point where our sales have stabilized and our inventories have gone down,” Morin said.
Stein Mart also has changed its marketing efforts, advertising more on television to attract new customers. It had previously relied on direct marketing to existing customers and newspaper ads, Morin said.
“We know that (newspapers) is not exactly a growing medium,” she said.
Most of all, Stein Mart is trying to do a better job of selecting fashions that customers want, rather than emphasizing discounts.
“It all starts with product,” Morin said. “Discount is almost a dirty word to customers.”
As its stock price fell in late January, Stein Mart announced it was working with a team of investment bankers and financial advisers to look at possible strategic options for the company. However, with operations improving, Hawkins said after the meeting that the company has no formal process in place to explore alternatives.
Stein Mart last month reported earnings for the first quarter ended May 5 doubled to $7.3 million, or 16 cents a share.
While sales declined in the quarter, the company said comparable-store sales turned positive in April and it projected those sales to be flat to slightly positive in the second quarter.
Comparable-store sale are sales at stores open for more than one year and are considered a key indicator of a retailer’s performance.
Stein Mart’s stock rebounded to a 52-week high of $4.04 last month after the strong earnings report.
Morin said after the meeting that problems of other major retailers probably increased concerns in the market about Stein Mart’s future.
“There were big issues going on,” she said.
But Morin remained confident Stein Mart was on the right track.
“We knew we were cleaning up from a situation we needed to address,” she said.