2002 was a challenging year for WPS. Our team managed through changes in key leadership positions. Retail sales increased 29% despite depressed consumer and commercial markets. Customers were earned and maintained despite the continuous changes brought about by global manufacturing.
Tonight I am going to talk about key events from 2002, Sales, Inventory and ventures for 2003 and our people.
- Launching of WorkingPerson.com. Putting this site together was one of the most challenging projects I have ever participated in to date. The detail. Working with a programmer and a designer through a project manager was a unique experience. We were 90% completed with the project and 7 months behind schedule when the project manager shut her business down and went to work for a tanning salon.
- The loss of Howmet. At last year’s dinner we celebrated serving an 800 pair account. This was an account that any industrial shoe mobile company would be proud of and one that we lost not because of our service, but because of a global contract.
- Globalization. Manufacturing continues to move abroad. Our footwear vendors continue to move more of their production abroad. This creates problems with inventory management, return on investment, supply and brand positioning.
- Two things happen in the footwear business when more work product is made abroad. First initial margins suffer…we make less per pair. Then what will happen, or what is starting to happen, better import product will rival domestic product in price. The only people making out on this deal are the manufacturers and freight carriers.
- WAOR Ultimate Garage. The best promotion we participated in this year was headlining the WAOR Ultimate Garage. The WPS logo was displayed at UP Mall for over a month and WPS was mentioned over 50 times per day.
WPS has always been blessed with good people. The loss of Chad, Trisha and Monique brought us CJ, Aubrey, Tina and Chris in key operational positions. CJ has assumed responsibility for managing the footwear department, Aubrey the clothing department, Tina as the internal bookkeeper and Chris will lead the Industrial business segment. We are a young team and Working Person’s Store and are positioned to find opportunity.
Working Person’s Enterprises, Inc.
Total sales for the store, truck and web increased over 2001 sales by $201,000.
The sales projection for all business units in 2003 is twice that. Look around the table because these are the people that are going to make it happen. Whether you are the one that comes into the store every day or you are the “better half”, it will take all of us to make it happen in this challenging market. With the amount of inventory stocked, we have no other option but to grow.
We are going to accomplish this the same way we have done it in the past:
- Make people’s lives better by providing them the very best product at a fair price.
We are also going to
- Strengthen each of our channels of distribution- store, truck, web, catalog
- Improve our presence on the web
- More aggressive/persuasive television commercials
- Train our people better through better training materials, tests, mystery shoppers
- Improve on inefficiencies in the clothing department which Aubrey will elaborate on
- Grow the footwear sections
- Tina is going to manage inventory levels, margins and turns for each product category.
2002 retail sales rose 29% compared to 2001 sales. However, our gross margin dollars fell as a result of:
- The shift in price points from our increased inventory of globally sourced product
- Deeper discounts given on outerwear during the 4th Quarter
- More aggressive clearance strategies during the 4th Quarter
WPS cash position has suffered due to a surplus of outerwear inventories created by a distinct decline in sales to industrial accounts. This inventory surplus will consume any profit earned in 2002 and will require a cash infusion. Although we have much to be thankful for, our aggressive inventory levels continue to be a considerable source of liability and risk.
Business To Business Sales
2002 industrial sales fell 6% compared to 2001 sales. Dennis did a fantastic job of keeping the truck business going despite the dismal sales at once booming accounts. A special thanks to him for keeping that business unit alive during these challenging economic conditions.
Dennis’s successor on the truck is Chris who has assumed all responsibility for truck operations in 2003 so Dennis can be available to put together some exciting ventures in 2003 which he will share with us tonight.
Virgil has done a fantastic job building the truck business. His new challenge is to make up for the loss in business from existing customers by acquiring new, more profitable customers and increasing business at existing customers though mail order business from new employees and employees needing safety footwear in the time the truck is not there. Virgil and I work well as a team and I look forward to working with him in the revitalization of this business unit.
Nobody at Working Person’s Store sits still. Customers are always amazed at the changes they see at the store and feel proud of the growth experienced at Working Person’s Store. 2003 will be no different.
The site will undergo total reconstructive surgery this summer. The strategic objective is to add more legitimacy to the site by enhancing the visitor’s experience through:
- A better look
- Improved graphical design
- Improved graphical elements
- A look that will tie into all other media
- Improved Features
- Better search feature
- Search by brand feature
- Cross referencing inventory
We began the creation of a full color catalog and an interactive DVD. These will be packaged in a DVD case and will directly tie into workingperson.com. This marketing tool will be used in Chris and Virgil’s effort to acquire bigger truck accounts, police departments, and larger commercial contractors.
Thank you for coming tonight.
Thanks to CJ for coordinating this event.
Thanks to Caesar and the Summit Club team.
Thanks to the WPS team and their significant others, friends and family that support them as we continue to work to make Working Person’s Store the very best at serving the needs of working people.