Roots Q2 revenue grew more than 20% from a year ago – National

Roots says ‘pack and hold’ plan for unsold inventory will help avoid price drops

Canadian clothing retailer Roots Corp is entering its busiest sales period with high inventory levels and a “pack and hold” plan to clear backlogs.

The company’s chief executive Meghan Roach said on Tuesday the store’s best-selling season is the second half of the year, which typically accounts for about 70 percent of annual sales.

Roots is entering this peak period with “good inventory levels” – up 15% year-over-year – largely made up of its core clothing collections, she said on a call. conference.

Higher inventory levels at some US retailers have raised concerns about unsold goods leading to rampant discounting, eroding margins and margins.

The story continues below the ad

Roots chief financial officer Mona Kennedy said: “We are aware of market concerns about high inventory levels at certain retailers, which could lead to price drops.

“At Roots, we believe our inventory is less prone to potential declines.”

Read more:

Walmart cuts outlook on inflation pain, sends shockwaves to Wall Street

The brand’s apparel is primarily comprised of “limited, low-risk fashion products,” giving Roots the option to “pack and hold” excess inventory if needed, she said.

This means that any unsold merchandise at the end of the season can be put into storage until next year, when it will be placed back on store shelves.

It’s a strategy that usually won’t work for fashion retailers that drastically change their clothing collections each season, but an option for a retailer like Roots with a vintage look. than.

Kennedy says the company’s core collection accounts for about two-thirds of its inventory, making it an efficient method of packaging and keeping backlogs.

Her comments come as Roots reported a loss of $3.2 million in its most recent quarter compared with a loss of about $1.2 million a year ago, even as its total revenue grew by more than 20 percent. %.

The story continues below the ad

Read more:

Shopify’s big e-commerce bet has failed. What does that signal for the future of retail?

The retailer said losses amounted to 8 cents per share in the quarter ended July 30, compared with a loss of 3 cents per share in the same quarter last year.

The company’s second-quarter revenue came in at $47.8 million, up from $38.9 million a year earlier.

The increase comes as the company’s retail and e-commerce sales grew to $38.5 million from $30.4 million a year ago, while partner and other partners reached $9.3 million, up from $8.5 million in the same quarter last year.

Roach said the company’s revenue growth in the second quarter was driven primarily by higher in-store traffic.

© 2022 Canadian Press

Source link


News5s: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button