The Cato Corporation CATO Stock Description
The Organization, founded in 1946, operated 1,281 women's fashion niche stores at The month of january 31, 2009, in 31 states, primarily within the southeastern U . s . States, underneath the names "Cato," "Cato Styles", "Cato Plus", "It's Fashion", and "It's Fashion Metro". The Organization seeks to provide quality fashion apparel and add-ons at affordable prices, every single day in junior/missy, plus dimensions and women dimensions 7 to 16. The Business's stores have a broad range of apparel and add-ons, including formal, career, and casual sportswear, dresses, jackets, footwear, lingerie, costume jewellery and purses. A significant area of the Company's items are offered under its plr and it is created by various suppliers in compliance using the Company's specifications. Most stores range in dimensions from three,500 to six,000 sq ft and therefore are situated mainly in strip shopping malls moored by national discounters or market-dominant supermarkets. The Organization stresses friendly customer support and matched merchandise presentations within an appealing store atmosphere. The Organization offers its very own charge card and layaway plan. Credit and layaway sales symbolized 11% of retail sales in fiscal 2008. See Note 15 towards the Consolidated Financial Claims, "Reportable Segment Information" for any discussion of knowledge concerning the Company's two reportable segments: retail and credit.
The Business's primary objective will be the key fashion niche store for fashion and cost conscious women in the marketplaces. Management thinks the business's success depends upon being able to differentiate its stores from shops, mass merchandise discount fashion jewelry stores and competing women's niche stores. The important thing aspects of the business's business strategy are:
Merchandise Assortment. The Business's stores provide a wide range of on-trend apparel and accessory products in mainly junior/missy, plus dimensions and women dimensions 7 to 16 and stress color, product coordination and selection. Styles and colors are matched and presented to ensure that outfit selection is definitely made.
Value Prices. The Organization offers quality merchandise that's generally listed below comparable merchandise provided by shops and mall niche apparel chains, but is usually more fashionable than merchandise provided by discount stores. Management thinks that the organization has situated itself because the everyday low cost leader in the market segment.
Strip Shopping Mall Locations. The Organization finds its stores primarily in convenient strip centers moored by national discounters or market-dominant supermarkets that attract large amounts of potential clients.
Customer Support. Store managers and purchasers affiliates are educated to provide prompt and respectful service and also to assist clients in merchandise selection and wardrobe coordination.
Credit and Layaway Programs. The Organization offers its very own charge card along with a layaway intend to buy of their merchandise easier because of its clients.
The Organization seeks to provide a wide range of top quality and exceptional value apparel and add-ons to match the different life styles of favor and cost conscious women. Additionally, the organization aims to provide on-trend fashion in exciting colors with consistent fit and quality.
The Business's merchandise lines include formal, career, and casual sportswear, dresses, jackets, footwear, lingerie, costume jewellery and purses. The Organization mainly offers exclusive merchandise with fashion and quality similar to mall niche stores at affordable prices, every single day.
The Organization thinks the collaboration of their retailing team by having an broadened in-house product and direct sourcing function has enhanced merchandise choices and provides quality exclusive on-trend styles at affordable prices. The merchandise development and direct sourcing procedures provide research on emerging fashion and color trends, technical services and direct sourcing options.
As part of its retailing strategy, people from the Company's retailing staff frequently visit selected stores, monitor the item choices of other merchants, regularly contact store procedures affiliates and sometimes consult with key suppliers. The Organization also takes aggressive discounts on slow-selling merchandise and frequently doesn't continue merchandise to another season.
Buying, Allocation and Distribution
Although the organization purchases merchandise from roughly 1,500 providers, the majority of its items are bought from roughly 100 primary suppliers. In fiscal 2008, purchases in the Company's biggest vendor paid for for roughly 4% from the Company's total purchases. Not one other vendor paid for in excess of 3% of total purchases. The Organization isn't determined by its biggest vendor or other vendor for merchandise purchases, and losing each vendor or number of suppliers will not have a fabric adverse impact on the business's operating results or personal finances. A considerable area of the Company's items are offered under its private labels and it is created by various suppliers in compliance using the Company's strict specifications. The Organization purchases the majority of its merchandise from domestic importers and suppliers, which usually minimizes time essential to purchase and acquire deliveries to be able to enable the organization to respond to merchandise trends inside a more timely fashion. Although a substantial area of the Company's items are manufactured overseas, primarily within the China, the organization doesn't expect that any economic, political or social unrest in almost any one geographic region might have a fabric adverse impact on the business's capability to obtain sufficient supplies of items. However, the organization can provide no assurance that any changes or interruptions in the merchandise supply chain wouldn't materially and negatively affect the organization. See "Risks - Risks Relevant To The Business - Changes or any other interruptions within the Company's merchandise supply chain, including individuals affecting the importation of products in the foreign marketplaces supplying a lot of the business's merchandise, could materially and negatively modify the Company's costs and outcomes of procedures."
An essential element of the business's technique is the allocation of items to individual stores according to an analysis of sales trends by merchandise category, customer profiles and weather conditions. A merchandise control system provides current info on the sales activity of every merchandise style in each one of the Company's stores. Point-of-purchase devices within the stores collect and transmit sales and inventory information towards the Company's central database, enabling timely reaction to sales trends on the store-by-store basis.
All items are shipped straight to the business's distribution center in Charlotte now, New York, where it's looked over after which allotted through the merchandise distribution staff for shipment to individual stores. The flow of items from receipt in the distribution center to shipment to stores is controlled by an on-line system. Deliveries are created by common company, and every store receives a minumum of one shipment each week. The centralization from the Company's distribution process also subjects it to risks in case of harm to or destruction of their distribution facility or any other interruptions affecting the distribution center or even the flow of products into or from Charlotte now, New York generally. See "Risks - Risks Relevant To The Business - An interruption or shutdown in our centralized distribution center could materially and negatively affect our business and outcomes of procedures."
The Organization uses television, available signs, graphics along with a Company website since it's primary advertising media. The Business's total advertising costs were roughly .8% of retail sales in fiscal 2008.
The Business's store procedures management team includes 1 director of stores, 4 territorial managers, 15 regional managers and 140 district managers. Regional managers get a salary along with a bonus according to achieving specific goals for sales, payroll, shrinkage control and store profitability. District managers get a salary along with a bonus according to achieving specific objectives for district sales increases and shrinkage control. Stores are usually staffed having a manager, two assistant managers and extra part-time sales affiliates with respect to the size the shop and periodic personnel needs. Store managers get a salary and all sorts of other store staff is compensated per hour. Store managers, assistant managers and purchasers affiliates are qualified for monthly and semi-annual bonuses according to achieving specific goals for his or her store's sales increases and shrinkage control.
The Organization constantly aims to enhance its training programs to build up affiliates. Over 80% of store and area management are marketed from inside, permitting the organization to internally staff an growing store base. The Organization has training programs each and every degree of store procedures. New store managers are been trained in training stores handled by experienced affiliates who've accomplished superior leads to meeting the business's goals for store sales, payroll expense and shrinkage control.
