During Sam Sato’s first earnings conference call as CEO of The Finish Line−former CEO Glenn Lyon retired last month−he stressed innovation as a crucial piece of the customer loyalty puzzle.
“I want to expand on my commentary from our last call regarding the productive discussions we continue to have with our vendor partners, and the work we are doing to elevate our product offering,” Sato said during the company’s fourth quarter earnings call on March 24, according to Seeking Alpha. “Consumers will soon see us bringing product stories to life with a much greater emphasis on innovation. This will be especially true in store, where we are stepping up collaboration with our brand partners and increasing our investment in store remodels.”
Sato said there is an “acute sense of urgency throughout the organization to quickly address the issues that have plagued us and contributed to our recent performance and, more importantly, to drive improved execution and results going forward.”
Since he became CEO, Sato said he’s evaluated Finish Line’s business with a fresh perspective.
“In my review I have seen the significant strengths rooted at the core of our business, including a dedicated team, collaborative and supportive vendor partnerships, and a capacity to grow,” he explained. “I am also keenly aware of where we need to focus our attention and efforts, primarily with basic blocking and tackling to drive improved performance near-term and position Finish Line to compete and succeed long term. Starting with our supply chain, we improved our performance significantly in the fourth quarter and are making strides each day to reach peak performance. Direct-to-consumer fulfillment rates in the first 24 hours are at 80% of historical norms as inventory accuracy and out-of-stock rates have dramatically improved. This compares to Q3 when fulfillment rates in the first 24 hours dropped to about half of our historical output.”
Fulfillment in the first 48 hours, as well as cancellation rates, are both nearly on par with historical levels, Sato said.
“Our click-to-door delivery times are now surpassing what we achieved prior to our new system implementation,” he said. “That said, there is more work to do to get new receipts flowing through our distribution center and into our stores on a timely basis, as well as to get our fulfillment rates back to historical levels and beyond. We are continuing to prudently invest in temporary resources to get our supply chain operating with the optimal output. We are moving as quickly as possible so we can begin benefiting from our new warehouse and order management system as the year progresses.”
Sato outlined four priorities for fiscal 2017.
“These are one, strengthening engagement with the Finish Line consumer; two, driving the performance and contribution of our Macy’s and JackRabbit businesses; three, establishing the right leadership team; and four, creating an operating model that drives profitable growth and generate shareholder value consistently over the long term,” he explained. “Starting with strengthening engagement with the Finish Line consumer, which involves a number of areas across our business, including continued enhancement of our merchandise offering, creating the best-in-class service model in our stores and online, marketing investments, and our omnichannel and CRM initiatives.”