Moreover, in Body Central Corp (NASDAQ:BODY)’s latest earnings call, the CEO talked about how too many stock-keeping units or SKUs made it difficult for Body Central to make a fashion statement to its customers. Body Central plans to reduce SKUs and focus on products that will move and increase sales at a profitable level.
Body Central Corp (NASDAQ:BODY) also plans to revisit its store layout and build a new store prototype. In this new store format, consistent with the lower SKU strategy, it intends on making the store less cluttered and install new lighter and brighter fixtures.
In a move I totally agree with, Brian Woolf plans to slow the expansion of stores until the company can get better situated on its merchandising strategy and store layout with the opening of 25 stores in 2013 due to lease commitments. In addition, he wants consistency across all channels. He realizes that in order to build a strong brand, the consumer needs to identify with the company in a positive way.
Looking forward, clearance of old inventory will continue as the new management team identifies and executes its new strategy. Body Central Corp (NASDAQ:BODY) expects things to start turning around in the 4th quarter of 2013 and to continue its momentum in 2014. With this potential turnaround comes a great deal of uncertainty and risk but also the highest potential reward. A properly incentivized CEO, a merchandising executive watching trends firsthand in New York City, and a new reinvigorated senior marketing and merchandising team add up to a recipe for excellent shareholder returns over the long term. I was bearish on the company due to its inept predecessor team. With new management blood, I am now bullish and made an outperform Motley Fool Caps call for 2-4 years which coincides with Mr. Woolf’s incentive plan.
The article Body Central: A New Hope originally appeared on Fool.com and is written by William Bias.
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