Dive Brief:
- Torrid CEO Lisa Harper said Wednesday during an earnings call that the company is evaluating its brick-and-mortar footprint and wants to move to a 50-50 split between mall-based and non-mall locations in the future. About 65% of Torrid’s stores are currently in malls.
- The footprint evaluation comes as the company reported Q1 net sales fell 4.8% to $279.8 million from $293.9 million a year ago. Comparable sales fell 9% during the first quarter. Gross margin was 41%, up from 38% a year ago, while net income was $12.2 million, up 3%.
- Torrid also announced a number of executive changes on Wednesday. Chief Technology Officer Hyon Park is the brand’s new chief operating officer and Ashlee Wheeler is the new chief planning officer. Both of those changes are effective immediately. Additionally, Chief Commercial Officer Mark Mizicko is retiring on Friday. He will stay on as a project consultant.
Dive Insight:
Torrid is leaning into off-mall stores, as customers increasingly shop at retail locations that aren’t inside malls. Anchor stores like Macy’s and J.C. Penney, along with specialty retailers like Journeys and Bath & Body Works, are making similar moves.
Stores remain the focal point of Torrid’s business model, although half of the business is online. That allows for more selection and enables the company to more quickly respond to trends while keeping inventory down, William Blair analysts led by Dylan Carden said in a note.
Carden also said William Blair’s estimates indicate that “nearly half of the company leases could come due in the next two years,” which would allow Torrid “incredible flexibility to reposition the fleet to more profitable, higher traffic areas.”
For the quarter ended May 4, the company says it opened six stores and closed three, ending the first quarter with 658 locations — 20 more year over year. Analysts said Torrid appears to be on better footing in Q1, with Jefferies analysts led by Corey Tarlowe saying in a note that Torrid’s Q1 topline results fell within the high end of its prior guidance range. Tarlowe also said improved inventory positioning helped drive better regular price sales.
Torrid, whose specialty retail offering is women’s apparel and accessories in sizes 10 to 30, didn’t immediately respond to questions from Retail Dive on Thursday regarding the company’s plans to fill the chief commercial officer position following Mizicko’s retirement or who would take over his responsibilities.
New Chief Planning Officer Wheeler has been with Torrid for 13 years. She will lead all elements of planning, strategy, pricing and promotion, omnichannel fulfillment and analytics. Park, who joined the company from Belk in 2022 as chief technology officer, will retain that responsibility, along with overseeing supply chain management and store operations.
