99 Cents Only seeking momentum boost

15/12/2015
With a new leadership team in place, 99 Cents Only Stores plans to implement a series of initiatives designed to restore positive momentum, Geoffrey Covert, president and CEO, said Monday.

After just three months with the company, Covert acknowledged its programs have been strong “but implementation was weak.”
To reverse direction of the Los Angeles-based company, Covert said 99 Cents Only has begun running a series of programs in a test market, which he declined to pinpoint, designed to improve the customer shopping experience, with increased inventories, reduced shrink and more operating efficiencies.
“For example, we will reintroduce re-grand opening events, and we are developing programs to ensure the top 300 re-orderable items are always in stock and inventory levels are stable,” he explained.
“We will try these programs in the test market, learn quickly, and then expand them quickly to other markets.”
Covert said the company also plans to reduce shrink by managing inventory more efficiently — to order the right quantities on both everyday and opportunistic buys to get proper sell-through.
99 Cents Only will also take a more measured approach to new-store growth, he said, noting that 56 store openings over the past two years had cannibalized existing markets and depressed profits.
For the third quarter ended Oct. 30, the company had a net loss of $152.6 million — which included a non-cash goodwill impairment charge of $120 million related to the retail reporting unit. Sales for the quarter rose 2.8% to $491.5 million as a result of the new-store openings, the company said, while same-store sales fell 3.9%, including a decline of 5.1% in customer traffic offset by an increase of 1.2% in average ticket size.
Gross margin for the quarter fell 460 basis points, with cannibalization accounting for a 140-basis-point decline; shrink for 160 basis points; and initiatives to clear excess inventory for 50 basis points.
For the nine-month period the loss was $229.6 million, with sales up 5.1% to $1.5 billion and same-store sales down 2.5%, with customer traffic dropping 4.4% and average ticket up 2%.
Covert was formerly SVP, retail divisions, for Kroger Co. Other new senior executives include Felicia Thornton, former co-CEO, president and COO of Demoulas Super Markets and former CFO of Albertsons, as CFO and treasurer; and Jack Sinclair, former EVP, grocery, for Walmart, as CMO.

Fonte:http://supermarketnews.com/dollar-stores/99-cents-only-seeking-momentum-boost

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