Zumiez’s focus on employee empowerment and commitment to new brands continues to be the cornerstones of its success, Chris Work, its CFO, said Thursday at the B. Riley 3rd Annual Consumer Conference.
Work pointed to four attributes that differentiate the Zumiez model.
The first, “Culture,” largely focuses on empowering employees. Zumiez looks to employees “who fit the lifestyle” of Zumiez’s action-sports themed mix and are “passionate about what they do.” But the company also make their jobs “very incentive-based” and looks for individuals that “embrace competition” and those who “bet on themselves because they believe they’re going to win.”
A second Zumiez strength is “Growth.” Well beyond store expansion, that again refers to its employees with most regional managers and even many headquarters employees gaining their start with Zumiez on the selling floor.
Third is “Unique” and that refers to its product mix. Zumiez has carries about 600 different brands and typically adds 100 new ones every year. It’s also “very open” to smaller brand that may only be able to sell to five, 10 or 15 stores because of their embryonic infrastructure. Efforts are also made to stock local brands to help that individual store stand out in their community.
Work said Zumiez stocks a collection of “emerging, growth and mature brands” while recognizing it’s important to support the smaller, emerging brands because some will “lead the results in future years.”
Apparel represents about 50 percent of the mix consisting of 37 percent men’s and 13 percent women’s. The rest is made of footwear and accessories. Not individual brand makes up more than 6 to 9 percent of its mix.
Finally, Work pointed to “Zumiez University” as a differentiator. Zumiez brings all its store managers together three times a year to offer “intense training and some recognition.” The sessions include product knowledge but also tips on leadership and customer service skills.
Work said Zumiez’s biggest growth opportunity remains Europe. The company entered the region with its 2012 acquisition of Blue Tomato, which had 3 stores and a large online business at the time. It now has 30 stores in Europe in Germany, Austria and Switzerland. But Work said 60 percent of Zumiez sales are still done on the website and “a lot of” of its e-commerce sales are outside Germany, Austria and Switzerland to underscore its growth potential. The site translates to 14 languages.
In the U.S., Zumiez has about 600 doors and has largely reached its expansion potential and may close doors in the years ahead given the challenges malls have seen driving traffic.
Work noted that of its 20 percent least-productive stores, 80 percent are up for leased renewals in the next three years. Overall, about 60 percent are up for renewal. Work said the company said that having stores in a market are still essential to provide an omnichannel experience. He noted that in places where Zumiez doesn’t have a store, “I don’t really have a website.”
He also noted if the lease structures work, Zumiez will be open to staying in B or C mall centers as long as the find a way to remain relevant to their community.
“We do believe there is a brick & mortar future and that our customer wants to be out in the mall,” said Work. “I think malls will just continue to evolve. And we’re going to look at how do we serve our consumer the right way in the physical world and digital world in each trade area.”
Photo courtesy Zumiez
