Finish Line to invest $15M in digital
More than 70% of Finish Line’s digital traffic has shifted to mobile, CEO Sam Sato told analysts last week, according to a conference call transcript from Seeking Alpha.
He added that the company is on track to invest as much as $15 million to upgrade its digital and mobile offerings during its current fiscal year. The upgrades are part of an effort to improve Finish Line's mobile page load speed, checkout flow and cross-device usability.
The sports gear retailer has also added a feature to make it faster and easier for customers to make returns through Finish Line's website, Sato also told analysts. Last week, the retailer said that Q2 same-store sales fell 4.5%and net income fell to $2.8 million, compared to $22.1 million in the year-ago period.
As with apparel retail in general, sports gear and sports apparel sales have been a struggle for all players.
Nike's news this summer that it will ramp up its direct-to-consumer sales, in part by selling directly on Amazon, is also a blow to department stores and specialty retailers like Finsih Line, Foot Locker, Hibbett's and Dick’s Sporting Goods, as well as to third-party Amazon Marketplace sellers offering either bona fide or counterfeit Nike goods.
But Finish Line is especially at risk, according to a note from UBS retail analyst Michael Binetti last month, in which he downgraded the stock. The retailer's struggles continue despite an effort to close under-performing stores and remodel the remainder.
Finish Line shuttered 24 underperforming stores in fiscal 2017, bringing the total number of closures to 78 over the last two years, and the company has identified and plans to close another 15 to 20 locations this year. Meanwhile, the retailer updated 42 stores in fiscal 2017, and executives said earlier this year that the company has financially benefited in the process.
The approach is sound, but the implementation has been somewhat off, according to GlobalData Retail managing director Neil Saunders. Saunders said earlier this year that forced discounts have been unfortunate, considering Finish Line's efforts to improve its inventory.
That said, the retailer's refurbished stores are doing better, Saunders has noted, “which indicates that there is some hope for the changes being made.”
- Seeking Alpha Earnings Call Transcript The Finish Line's (FINL) CEO Sam Sato on Q2 2018 Results
- press release Finish Line Reports Second Quarter Fiscal Year 2018 Results
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