COPPELL, Texas - Home storage organization retailer The Container Store Group has implemented its luxury closets line TCS and organization service Contained Home in every store. And according to Kip Tindell, CEO of The Container Store, the custom closet line was was a key driver in sales performance for the company in the fourth quarter.
We performed much better than we projecrted for fourth quarter sales, said Kip Tindell, Chairman and Chief Executive Officer. “Our TCS Closets initiative was again a key driver of performance, providing a 140 basis point lift to overall comparable store sales.”
Despite exceeding those fourth quarter expectations, The Container Store is also initiating several cost-cutting measures that it says will not impact its custom closets focus. Those measures include: a company-wide salary and wage freeze and a 401k match freeze, a reduction in payroll, plus more extensive efforts to drive costs out of the business.
For fiscal 2016, The Container Store plans to prioritize initiatives that focus on dominating the custom closet market inclusive of continued improvements to its custom closet selling process and employee selling skills training, an enhanced online and in-store experience, new product development, and robust marketing support for its TCS Closets, elfa and closet completion solutions. The company says that the benefit of the investment in the launch of TCS Closets, which was completed in all stores in late fiscal 2015, is expected to be realized in fiscal 2016 and beyond.
Closet-related solutions are The Container Store’s dominant category, making it the retailer’s primary area of expertise and the most natural and strategic area for focus and differentiation. The company will launch a Customer Financing Program in summer 2016 and is intended to drive incremental spend and increased conversion of its higher average ticket elfa® and TCS Closets solutions, of which the average TCS Closets ticket remains over $10,000.
The Container Store also expects to open a total of eight new stores (inclusive of one relocation) in fiscal 2016 (four of which are scheduled to open in the first half of the fiscal year) including, Novi, MI, Palm Beach Gardens, FL, Pittsburgh, PA, Des Moines, IA, Troy, MI, Omaha, NE, Baybrook, TX and a relocation of the Chestnut Hill, MA location. The company will annually evaluate its store growth plan, adjusting it as appropriate in response to the overall retail environment, real estate opportunities and operational priorities. And it intends to pilot a reduced square footage format in fiscal 2017 for new stores in select smaller markets with an objective to further maximize profitability.
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