Select Comfort to introduce new products at new price points
24 Apr '08
3 min read
• Eliminated more than 170 positions including 17 percent of corporate staff; • Reduced promotional discounts and took pricing action that total approximately $12 million over the balance of the year; • Reduced planned 2008 store openings from 30 to 24 stores. As previously communicated, the company will close approximately 15 stores in 2008 and will continue to monitor performance across its entire store base to determine if additional actions are necessary; • Reduced the number of store remodels from 50 to 20 for the year; • Deferred the launch of SAP until 2009, in order to reduce the short-term cost and resource impact associated with implementation.
In addition to aggressively managing costs and better aligning infrastructure with current business trends, the company has strategically invested in programs to drive improved sales and profitability, including:
• The launch of a new comprehensive brand marketing campaign across all company-owned channels and multiple media forums; • Restoring media spending to 2007 levels; and • Introducing new products at new price points.
First Quarter Summary: First quarter sales benefited from 34 net new company-owned stores opened during the past 12 months. Broader product distribution partially offset a 25 percent decline in first quarter same-store sales.
First quarter e-commerce and direct-marketing sales were negatively impacted by lower media investments, with revenues in these channels declining 19 percent and 32 percent, respectively. Wholesale sales declined 37 percent, primarily due to two factors: timing of QVC shows in the first quarter, as well as the launch of an updated retail partner product last year that increased prior-year sales.