West Marine revenues up amid focus on flagship stores, e-commerce growth
July 27, 2012
Filed under News
West Marine’s net revenue increased 3.2 percent in the second quarter compared to the prior year as the boating accessories retailer continued its store optimization strategy and worked to tweak its merchandise strategy.
West Marine made about $243.6 million in the quarter, while net income decreased 50 percent year over year to $22.6 million due to a large tax benefit recorded during the second quarter in 2011.
Sales increased in the company’s core categories, as well as electronics, fishing and soft good categories, according to the company’s earning release.
In its second-quarter earning call, West Marine CEO Matt Hyde said the company continues to focus on improving its apparel merchandising, which he describes as an extremely competitive product category, through refining product assortment and display.
Stores opened in 2011 and the first six months of 2012 contributed $17.8 million to the company’s revenue, while closed stores reduced revenue by $14.5 million, according to the release.
Many of the closings are due to West Marine’s real estate optimization strategy. West Marine closed down three smaller stores in Fort Myers, Fla., and recently opened a 25,000-square-foot flagship store in the city. Hyde said West Marine will follow a similar strategy in two more Florida cities: Naples and Pompano Beach, where two smaller stores will close to make way for a flagship location.
Tom Moran, chief financial officer at West Marine, said the average size of stores opened during the second quarter was 16,200 square feet, while closed stores averaged 7,900 square feet.
Hyde said another major focus for West Marine will be to improve its direct-to-consumer and e-commerce segment. Hyde said he hopes to leverage his past experience at outdoor gear retailer REI where he was responsible for the company’s e-commerce growth.