Attached files
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| 8-K - FORM 8-K - dELiAs, Inc. | d375465d8k.htm |
 Annual Meeting
Presentation July 9, 2012
Exhibit 99.1 |
 This
presentation
contains
forward-looking
statements.
Forward-looking
statements
are
based
on
current
expectations
and
projections
about
future
events
and
are
subject
to
risks,
uncertainties
and
assumptions
about
our
Company,
economic
and
market
sectors
and
the
industry
in
which
we
do
business,
among
other
things.
These
statements
are
not
guarantees
of
future
performance,
and
we
undertake
no
obligation
to
publicly
update
any
forward-looking
statements
whether
as
a
result
of
new
information,
future
events
or
otherwise.
Actual
events
and
results
may
differ
from
those
expressed
in
any
forward-
looking
statements
due
to
a
number
of
factors.
Factors
that
could
cause
our
actual
performance,
future
results
and
actions
to
differ
materially
from
any
forward-looking
statements
include,
but
are
not
limited
to,
those
discussed
in
risk
factors
within
our
Form
10-K
for
the
fiscal
year
ended
January
28,
2012,
and
our
Form
10-Q
for
the
fiscal
quarter ended April 28, 2012, as filed with the Securities and Exchange
Commission. Disclaimer
2 |
 Fiscal 2011
Statement of Operations Total revenue decreased 1.6% to $217.2 million from revenue of
$220.7 million in the prior year
Retail revenues increased 0.6% to $123.2 million, while full year comparable sales
increased slightly by 0.1%
Direct revenues decreased 4.4% to $93.9 million
Total gross margin was 31.5% compared to 33.3% for the prior year
Decrease primarily driven by markdowns on product purchased under prior
merchandising strategy
SG&A decreased as a percent of revenues to 42.7% from 43.4% for fiscal 2010
Total SG&A dollars decreased by $3 million, resulting from reductions in both
selling and overhead expenses
Net
loss
for
fiscal
2011
was
$22.7
million,
or
$0.73
per
diluted
share,
compared
to a net loss of $21.6 million, $0.70 per diluted share for fiscal 2010
3 |
 Fiscal 2011
Balance Sheet Summary Year end cash and cash equivalents were $28.4 million
Entered
into
a
new
5
year,
$25
million
revolving
credit
facility
with GE
Total net inventories were $30.9 million at year end compared with
$32.0 million at prior fiscal year end
Average store inventory was down 7.4% versus prior year end
Direct segment inventory was down 5.3% versus prior year end
Cash capital expenditures were $4.0 million, down from $5.8 million in the
prior year
Opened 1 new store, remodeled/relocated 3 other locations and closed
two stores, ending the year with 113 locations
4 |
 Strategic
Initiatives 5 |
 3-Pronged
Strategy 6
Product/
Merchandising
Driving Sales
Productivity in All
Channels
•
Increase All Parts of Sales Equation:
•
Traffic
•
Conversion
•
Average Order
Selling Expenses
Overhead
CapEx
•
Overhead Needs
•
Challenge and Redirect Selling Expenses
•
CapEx Rationalization
•
Merchandising Architecture
•
Pricing & Promotion
•
Product Development
•
Organization –
Align to support merchandising
strategy |
 Merchandising
Architecture Sell the outfit with increased color choice count offering
Increase web/store tests, with ability to react quickly through new sourcing model
and vendor structure
New category mix with additions of party dresses, swim and increased non-apparel
offering
Now
Then
Consistent flow of merchandise
4 quarterly floorsets with updates
Less dependence on key items
70% of sales and inventory in 30 key items
Fashion buys 4 weeks of supply
Fashion buys 8 weeks of supply
7 |
 Pricing and
Promotions 8
Achieve higher fashion sell-through at
planned price points
Plan promotional buys around key
events in her life
Promotions planned upfront not
reactionary
Support with marketing strategy
Maintain leaner inventory levels with
more frequent faster-turning deliveries
Better sourcing on key items to reduce
cost |
 Product
Development Shift mix to
fashion merchandise/less
emphasis on key items
•
Drive units per transaction (UPT) with focus on
outfitting
New sourcing model enables faster “market to
customer”
product flow
•
Increased chase supported by new sourcing
model and flexible vendor structure
Increase frequency of floor sets to 12 per year
•
With flow of new product every week
9
Focus on trend-right merchandise, more frequent flow
of new product and faster turns
|
 Driving Sales
Productivity in All Channels 10
•
Increase frequency of new merchandise offerings
•
Increase frequency of changes to window and visual displays
•
Launch of new websites drives natural search
•
Plan promotional events around events in her life
Traffic
•
Increase frequency of new merchandise offerings
•
New pricing and promotional model
•
Expanded merchandise offerings
•
Increase non-apparel offerings
Conversion
•
Drive UPT through outfitting, including accessories
•
New web functionality that supports upselling and outfit
selling
•
“Two-For”
promotions drive UPT
•
More frequent changes to visual merchandising with
emphasis on outfitting
Average Order |
 Selling
Expenses, Overhead, CapEx 11
CapEx
Prioritization
Overhead
Selling
Expenses
•
Evaluate real estate portfolio, 70 stores up for
renewal in next 3 years
•
Re-evaluate payroll model in stores
•
Continue to rationalize catalog circulation
•
Re-invest into web marketing
•
Hiring correct organization for merchandising and
creative departments
•
Increase the web marketing group
•
Ongoing review of infrastructure and support services
•
Upgrade back end/WMS of direct business
•
Upgrade front end of web (MarketLive)
•
New store build out lowers costs by 25% |
 Results to
Date 12
•
350 bps of leverage in SG&A in Q1
•
Completed transition to outsourced contact center and upgrade
of order management system
•
Occupancy cost reductions in line with expectations; Shifting
focus to new store growth for 2013 and beyond
•
Double digit traffic increase in stores and web
•
Increase to conversion in Q1 in stores and web
•
Double-digit increase in dELiA*s 12-month buyer file
Selling Expenses
Overhead
CapEx
Driving Sales Productivity in
All Channels
Product/
Merchandising
•
Retail:
•
Q1 comparable store sales +7.3%
•
200 bps increase in merchandising margins
•
Direct:
•
Q1 revenue increase of 6.6%
•
230 bps decrease in merchandise margins, as we
cleared holiday goods
•
Q2 Trend:
•
Sales trend in both channels strengthen
•
Increase in margin rates both channels |
 2012 Financial
Goals Positive sales growth in both retail and direct
Improved margins resulting from sourcing, merchandising and promotional
changes
Reduced occupancy costs in both dollars and as a percent of revenues
Reduced selling expenses in both dollars and as a percent of revenues
Positive EBITDA
Year
end
cash
and
cash
equivalents
of
$22
-
$27
million
Capital
expenditures
of
approximately
$3.5
-
$4.5
million
Lower inventory in the direct segment and lower average per retail store
13 |