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Revenue is great. Stock performance is a bonus. But profit is king. Retailers are in business to make money and there is no greater indicator of financial success then profit margin.
Apparel Magazine's annual Top 50 ranks the 50 apparel brands with the highest overall profit margin. The good news for apparel retailers is the average profit margin for the first 10 retailers to make the list increased to 11.37% in 2015, up from 10.68% last year. Interestingly, last year's highest profit margin among retailers was claimed by lululemon with a 17.57% score, which bests this year's top retailer The Buckle (14.10%) by over three percentage points.
Click here to download the entire Top 50 report. Here is a quick look at the top 10 retailers on the list:
The Buckle. The Buckle is steady — it has remained in the Top 5 since it debuted on this ranking in 2009. It is enjoying 13 consecutive years of sales growth, which it attributes, year after year, to the talent, dedication and longevity of its teammates, and their commitment to create the most enjoyable shopping experience possible. The company continues to expand, opening 16 new stores, completing 18 full remodels and closing six stores, ending the 2014 with 460 stores in 44 states. Profit Margin: 14.10%.
Kate Spade. The company has knocked it out of the park since rebranding last year from Fifth & Pacific (as it completed the divestitures of Juicy Couture and Lucky Brand), moving closer to its $4 billion at retail goal. Continuing to hone its strategy, in January it announced plans to close its lower cost Kate Spade Saturday stores and Jack Spade men’s stores to focus efforts on expanding its core brand in the four categories of women’s, men’s, children’s and home, which, along with a reduction in the number of outlet stores it plans to open, should help to avoid the loss of cachet and overexposure that has taken a toll on luxury brands such as Michael Kors and Coach. Profit Margin: 13.98%.
lululemon athletica. In the fourth quarter, Ivivva — lululemon’s girls’ yoga wear brand — saw comp store sales jump 51% over the same period the previous year. The retailer's men’s wear is also on the rise, driven by its Sweat line, with sales up 13% in Q4. The company launched a mobile shopping app, which achieved more than 367,000 downloads in 2014 and an activation rate of 76%, representing approximately 8% of online sales in Q4. It also began processing sales in store from its online inventory. A third DC that opened in Columbus, Ohio extends distribution capacity for Europe and cuts shipping times to the Eastern U.S. by half. Profit Margin: 13.30%.
Christopher & Banks. The retailer climbed 39 positions in the annual ranking, despite a challenging retail environment of soft traffic and continued pressure on apparel discretionary spending. Even so, 52 of the company’s 518 stores reached or exceeded net sales of $1 million (vs. four in 2011). Continuing to roll out its new missy-petite-women (MPW) store concept through openings and conversions, the retailer ended 2014 with 50% of stores in the new format, a strategy it tested in response to customer surveys that revealed that nearly 30% of its customers shopped both brands. By combining all sizes 4 to 24 and CJ Banks and Christopher & Banks brands in one shopping location (and all websites into a single e-commerce site) customers can find everything they need in one place. Profit Margin:11.25%.
For complete article on RISnews.com, please click here.
