Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Stage Stores Inc (SSI): America’s Leading Small Town Retailer

Stage Stores Inc (NYSE:SSI) is a Houston-based retailer that operates both department and off-price stores primarily in small and mid-sized towns and communities. Its department stores, which operate under the Bealls, Goody’s, Palais Royal, Peebles and Stage brands, offer moderately priced, nationally recognized brand name and private label apparel, accessories, cosmetics and footwear for the entire family. Its off-price stores, which are called Steele’s, offer brand name family apparel, accessories, footwear and home merchandise at significant savings to department store prices. Stage Stores operates more than 864 stores in 40 states.

Stage Stores Inc (NYSE:SSI)Stage Stores was formed in 1988 when the management of Palais Royal, together with several venture capital firms, acquired the family-owned Bealls and Palais Royal chains. It has pursued a growth strategy focused on expanding the company’s presence in small markets. In 2010, Stage Stores began developing its off-price concept with the goal to leverage its small market expertise with a complementary format to its department store model. Steele’s, its off-price concept, was launched Nov. 1, 2011 with the opening of three stores. Stage Stores currently operates 34 Steele’s stores across seven states and plans to increase the number of off-price stores to 150 by 2015.

Business Quality

Stage Stores is the country’s leading small town retailer, with 65% of stores and 59% of sales in towns with a population below 50,000, which are under-served markets with limited competition. It differentiates itself from the competition in small and mid-sized communities by offering consumers access to both basic and fashionable brand name merchandise not typically carried by other retailers in the same area.

Stage Stores adopts a brand-focused merchandise marketing strategy to support each store’s position as the local destination for basic and fashionable, moderately priced, brand name merchandise. Apparel and cosmetics accounted for 97% of Stage Stores’ sales. It carries nationally recognized brands such as Levi Strauss, Nike, Calvin Klein, Chaps, Izod, Dockers, Carters, Jockey, Estee Lauder, Clinique, Nautica, Skechers and New Balance, not to mention Estee Lauder and Clinique treatment products in more than 200 of its stores.

Stage Stores’ small town retail focus has enabled it to develop a unique real estate strategy, with store formats that are smaller than that of typical department stores with an average store size of approximately 18,500 selling square feet. Approximately 87%, 10% and 3% of its stores are located in strip shopping centers, local & regional shopping malls, and free standing & downtown buildings, respectively. Unlike other retailers, Stage Stores attempts to locate its stores in the vicinity of grocery stores, drug stores, and major discount stores such as Wal-Mart Stores, Inc. (NYSE:WMT) that it believes will help attract additional foot traffic to the area. Stage Stores does not compete directly for branded apparel sales with national discounters such as Wal-Mart due to minimal merchandise overlap. Also, its average rent for its 864 stores is $4.15 per square foot, among the lowest in the industry.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.