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A free shipping plan lifts Q2 web sales for The Container Store

October 7, 2015 10:17 AM
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The Container Store Group Inc. reported small overall sales growth for the second quarter while online sales increased almost 70%. The retail chain, which sells storage and organizational products online at ContainerStore.com, did not break out web sales but did attribute some of that growth to a free shipping program on purchases of $75 or more for online, catalog and store orders.

Free shipping, introduced in the second quarter, “was a big, big boost to our online sales,” chief financial officer Jodi Taylor told analysts on the company’s earnings call Monday, according to a transcript from Seeking Alpha.

The Container Store will continue upgrading mobile commerce and its “multichannel shopping experience with improved search engine optimization, video content, and community question-and-answer functionality, while using its website to grow the brand with initiatives like the June 2015 launch of Container Stories,” its lifestyle blog, president and chief operating officer Melissa Reiff told analysts.

The company also offers pickup for online and phone orders at most stores, and same-day delivery from its Manhattan stores to select areas in New York, New Jersey and Connecticut for t fees of $25-$59.

For the second quarter ended Aug. 29, The Container Store, No. 321 in the Internet Retailer 2015 Top 500 Guide, reported:

  • Total sales of $195.5 million, up 1.2% from $193.2 million in the second quarter of fiscal 2014.
  • Net income of $2.7 million compared with $7.0 million in the same period last year.

Overall second quarter sales got a boost from TCS Closets, the company’s new custom closet design and installation service. Its average ticket has exceeded $10,000 since launch, the company says, compared with its day-to-day average ticket of approximately $60. Almost a quarter (23%) of TCS Closets customers buy more than one TCS Closet, and those orders come from The Container Store’s in-store and call center salespeople combined with Container Home in-home professional organizer services.

TCS Closets was available in 61 stores at the end of Q2, with plans to add the program to the company’s remaining 12 stores by the end of fiscal 2015. New stores will have TCS Closets in place on opening. The merchant opened three stores and relocated one during the first half of the fiscal year to end the quarter with 73 stores.

For the first six months of fiscal 2015 The Container Store reported:

  • Total sales of $365.3 million, down by 0.4% from $366.7 million in the same period last year.
  • Net loss of $2.5 million compared with net income of $3.4 million in the first six months of 2014.

The Container Store also announced it has signed an agreement with Synchrony Financial to implement a new customer financing program, with a planned launch in spring 2016. And the company says its re-branded business-to-business sales function, Business Solutions: Your Dedicated Source for Storage and Organization Solutions for your Business, “while still in its infancy, is growing at a rapid rate.”

 

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