Retail Executives Discuss Future at B. Riley Conference
The beach beckoned, but retail executives had their eyes on a brighter prize: their companies’ futures.
Financial-services company B. Riley & Co. hosted its 11th Annual Investor Conference on May 25 at the Loews Santa Monica Beach Hotel. Apparel companies presenting included The Wet Seal Inc., Volcom Inc., Hot Topic Inc. and Steve Madden Ltd.
Ed Thomas, chief executive of The Wet Seal, said his Foothill Ranch, Calif.–based company would support its comeback with some new marketing ventures. It will focus more of its sales and marketing efforts on African-American and Latino customers, whom Wet Seal considers underserved. In July, it will make a gambit for a higher online profile when it debuts a social-networking game. In the game, players will be given the goal to build a store. The yet-to-be named game will be in the same vein as the popular Farmville game on Facebook.
Doug Collier, chief financial officer of Volcom, said his Costa Mesa, Calif.–based company would aim to double its revenue growth to $550 million by 2014 and sustain its growth margin of 50 percent.
The leading surf and skate label intends to achieve those goals by continuing to develop Volcom product, particularly in its men’s, boys’ and snow categories. The company also intends to expand its domestic wholesale distribution and retail, leverage its international presence, and also build the business of Electric Visual Evolution LLC, or its Electric eyewear brand, which it purchased in 2008. Revenues from Electric increased to $5.6 million, or 33 percent for the quarter, which ended March 31.
The recent mixed success of Hot Topic was explained by Jim McGinty, the chief financial officer of the City of Industry, Calif.–based retailer. The company reported its first-quarter results on May 19. Net sales for the quarter were $162.6 million, and its total comparable-store sales declined 8.7 percent. However, the first-quarter net sales for Torrid, its juniors plus-size division, were $42.9 million, or an increase of 4.8 percent in same-store sales.
Hot Topic’s business was tough partially because it was compared with the retailer’s stellar business of the first quarter of 2008. Then it was the go-to place for merchandise for the hit movie “Twilight.” McGinty said the movie was the best license of Hot Topic’s over 20-year history.
As enthusiasm declined for the “Twilight” movie series and other retailers started competing for its business, Hot Topic developed other avenues for growth. In the first quarter of 2010, it piloted loyalty program HT + 1. Consumers can earn points for Hot Topic purchases. The program’s tracking system will help the retailer learn more about the tastes of individual customers and eventually will allow the company to sell more effectively to its customers.
Hot Topic also will strengthen its burgeoning Torrid division. Last year, the division hired a design team for Torrid. Now fashion and denim are increasingly popular categories. The retailer will open five more stores for Torrid and also promote more marketing events for the division.
During the Steve Madden presentation, the New York–based footwear label’s chairman, Ed Rosenfeld, said his growing company would strengthen its commitment to its new apparel line, which debuted in February, and diversify its retail. By the end of this year, the company intends to open outlet stores.—Andrew Asch
