West Marine’s net revenue increased nearly 5 percent in 2012 over the prior year as it moved forward with its store optimization strategy and increased focus on its e-commerce operations.
In 2012, West Marine’s revenue increased 4.9 percent to $675.3 million, while comparable store sales increased 3.3 percent, which marks the 12th consecutive quarter of comparable store sales growth.
In its conference call, West Marine CEO Matt Hyde stressed the success of its store optimization strategy where the company is closing smaller locations in favor of fewer, larger stores. In 2012, it opened 12 locations but decreased its total square footage by 11 percent; however, in that time, total store sales grew 5.4 percent.
For e-commerce, West Marine’s accelerated efforts paid off in 2012. Year-over-year e-commerce sales were flat in the first half of the fiscal year, but rebounded to a nearly 12-percent increase in the fourth quarter when compared to the prior year. Overall, e-commerce grew 4.7 percent for the year, according to CFO Tom Moran.
The investment in e-commerce, which includes an upgraded website, better search, quicker load speeds and improved checkout functions, resulted in higher capital expenditures, which Hyde said will continue in 2013.
“In 2013, the focus on improving e-commerce fundamentals represents the largest medium- to long-term growth opportunities for West Marine,” Hyde said.
Such investments will better leverage the company’s broadening merchandising strategy by making its product assortment – all of which brick-and-mortar locations are unable to carry – more readily available to customers.
The reason for broadening its product selection, according to Hyde, is to better appeal to a broader base of customers, which he said West Marine successfully did in 2012. Sales in its expanded merchandise categories increased by 14.6 percent in 2012 – compared to a 3.6-percent increase in its core categories.
In 2013, Hyde said West Marine would continue to invest in the aforementioned strategies, which he believes will lead to the company’s growth. Investments in areas like store optimization, information technology and e-commerce may increase capital investments by 40 to 60 percent in 2013, according to Moran.