Trying To Clean Up Their Act?
This is from 10K Form filed with SEC on 3/9/05 and can be found at http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=3526667&Type=HTML be prepared, it's long reading.
Attractive Store Level Economics. We have strong store level economics due to our low store operating expenses and the low initial investment required to open new stores. Our destination-oriented retail format allows us to open stores in a wide range of locations, resulting in attractive lease rates compared to those of other retailers. In addition to our low real estate costs, we maintain low operating and depreciation costs due to our no-frills, self-service format. Because we use low cost store fixtures and have low pre-opening costs, our new stores require a low initial investment and have historically generated a very attractive return on investment in their first full year.
And a little more... Store Layout. Our opportunistic site selection and no-frills approach to presenting merchandise allow us to use a wide variety of space configurations. The size of our stores generally ranges from 6,000 to 15,000 square feet and averaged approximately 9,200 square feet in 2004. We have designed our stores to be functional, with little emphasis placed upon fixtures and leasehold improvements. We display all merchandise at each store by type and size on racks or counters, and we maintain a minimum inventory in stockrooms.
Store Operations. We operate our stores during periodic sales events, each of which lasts from four to five weeks. We are generally closed for the first few weeks of January and July, which are traditionally weak months for retailers. We have increased the frequency of shipments of new merchandise during a sales event, which has resulted in improved efficiency of merchandise receiving and restocking activities at our stores. We have implemented initiatives to enhance the process by which merchandise is unloaded at the store and moved to the selling floor and we have increased our internal training program for store managers. Previously, new store managers attended our training program upon their hire or promotion. Now, each store manager receives on-going training on an annual basis through attending one of our monthly training sessions. We believe that this on-going training is a critical component to the success of our store management.
Store Management. Each store has a manager who is responsible for recruiting, training and supervising store personnel and assuring that the store is managed in accordance with our established guidelines and procedures. Store managers are full-time employees. We have increased our field management at the region and zone level to support and improve consistency of execution at our stores. When sales events are not in progress, employees review store inventory and supervise restocking activities in preparation for the next sales event. We employ temporary employees at each Tuesday Morning store to serve as cashiers and to assist in stocking during sales events. These temporary employees generally return to work in subsequent sales events, reducing the need for new hiring prior to each sales event. Typically, we employ more temporary employees during the first few days of a sales event, when customer traffic is highest.
Members of our management visit selected stores while sales are in progress to review inventory levels and presentation, personnel performance, expense controls, security and adherence to company procedures. In addition, regional managers periodically meet with senior management to review store policies and to discuss purchasing, merchandising and advertising strategies for future sales events.
Employees At March 1, 2005, we employed approximately 1,800 persons on a full-time basis and approximately 6,000 individuals on a part-time basis. Our employees are not represented by any union. We have not experienced any work stoppage due to labor disagreements and we believe that our employee relations are good.
Self-Insurance Reserves — We have agreed to bear a portion of the annual cost to insure for workers’ compensation, general liability and medical claims. Amounts in excess of the designated risk levels are covered 100% by our insurance providers. Workers compensation claims are generally resolved within a one to three year period, but can remain open and active for periods approaching seven years. We establish reserves for the potential remaining exposure on these claims based upon historical claims experience and the use of actuarial estimates of losses from such claims. Our estimated reserves may not be adequate if claims activity is higher than estimated or costs of medical care increase beyond what is anticipated.
Capital expenditures, principally associated with new store openings and distribution center systems enhancements, were $23.0 million, $17.3 million and $34.3 million for 2004, 2003 and 2002, respectively. During 2004 and 2003, capital expenditures were primarily for new store openings, material handling equipment in our distribution center and corporate office improvements. During 2002, we spent $17.0 million to purchase and expand a warehouse that we previously leased and $4.1 million to purchase an office building for our corporate headquarters. In 2005, we expect to spend approximately $18 million for capital expenditures, primarily for new store openings. Capital expenditures will be financed with funds generated from operations and borrowings under our revolving credit facility.
(If the part above highlighted in blue is true, please post a comment here...maybe things are changing, but beware of wolves in sheeps clothing.)
There is a lot of info in this article on Yahoo by Edgars.com. Worth the read. A small 'editors' note here...this is a forward looking prospectus, meaning none of it might happen for reasons stated and or unstated. A little getting off the hook essay.
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