Perry Ellis 1Q17 Earnings Call Notes

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Perry Ellis International’s (PERY) CEO Oscar Feldenkreis on Q1 2017

It’s all about product and inventory management

“It’s all about product, Eric. And I think that in today’s day and age, we’re seeing that when retailers deliver newness and product that is comfort that is as well as has some performance attributes and features it does extremely well. Also managing inventory and churn is very, very important as everybody is managing inventory cash flow has become topic — is number one topic. ”

Department stores will readjust their business model

“Department stores today represent about 25% of our revenues and we believe the department stores will continue doing well. I think that department stores are readjusting their business model and making a big focus on eCommerce digital, which is important as well as I think tourism has hurt department — some department stores more than other. And I think you’ll see a lot of changes in how they market themselves more for the local consumers versus talking so much to tourism”

E-commerce is more expensive vs brick and mortar

“we’re looking at ways to improve how we consolidate the distribution side. But, it is a challenge, eCommerce definitely is a lot more expensive versus brick and mortar. But, we have to adapt to the new way of — as mobility apparel online sales today account for about 18% and we’ll continue to grow even further. So it’s something that we’re looking out. We’re making a lot of improvements to ensure profitability.”

Amazon is a top 15 customer not quite top 5 yet

“They are probably up 15 they’re not top five at this present stage. Our business is good with them. We continue to meet with them to try to understand their new business model which is — they’ve taken an approach to understand better. And our relationship with them is very strong and looking to continue growing with them. And we have strong brands that are performing extremely well for them. ”

George Feldenkreis

H&M, Zara etc have taken share in women’s business

“Certainly the women business has been more of a challenge especially with the advent of the international competitor like Zara, H&M, et cetera, which unquestionably have taken market share away in the women’s and junior business from change on department. ”

The over-storing of America is coming to an end

“Time to recognize the over storing of America is coming to an end and that the sooner we reduce the store count the better, it will make retailer stronger, more focused and more profitable. In our case, we are reducing our full price store count and being very selective in opening new stores especially as retail developers continue to increase rents as all leases expire.”