Wednesday, October 12, 2016

Tuesday Morning Quarterbacking

Is Tuesday Morning in dire straits? The question came up in the comments related to Hey It's Muff's disappointing visit, and now Miss Hanzo wants to know, too. Fortunately, her financial advisor Dena has been reading the company's August financial reports and earnings call transcript, so Miss Hanzo has come to Dena's office to hear what's what.

Dena likes to keep her office minimalist.
Disclaimer: This post covers only issues of interest to fashion doll collectors and should not be construed to be investment advice.

Is Tuesday Morning on the road to nowhere?
Not right now. After some bad years, the company has been profitable for the past two fiscal years and has no debt on its balance sheet. One concern is that it's spending more cash on capex (building, repairing, buying equipment) than it generates from its stores, but it looks like a chunk of this was related to the new distribution center in Phoenix, which is completed. 

But my favorite store has vanished, Dena!
So why has my nearest store disappeared?
Additional capex is going toward building new stores in better locations -- while closing the weakest stores.
We had these stores all over the country in extremely random locations -- CEO Steve Becker
Here's our real estate expert, Alexis, to explain Tuesday Morning's real estate strategy!
It turns out that the random crazy locations (which had cheap leases) generate about $800,000 revenue per year, while the newer, more conventional locations generate about $2 million revenue per year, ramp up to full performance in about a year, and bring in shoppers who weren't familiar with Tuesday Morning. So there's a lot more store reshuffling ahead.
Historically, the Tuesday Morning shopping experience cast a shadow on our great products and terrific pricing. The evidence is overwhelming that when we provide the same product and pricing in a fresh store experience, our business improved significantly. -- CEO Steve Becker

Alexis loves when the seasonal merchandise comes out.
Is the toy section likely to improve any time soon?
The holiday season may be more exciting just because toy sections all get bigger, but... no, not unless a major doll line or two fails utterly, and that'd probably show up in after the holidays.

The chain is getting more focused on "seasonal" and on merchandise purpose-made for them, so look for more pillows and vases and stuff at the front of the store. Management says it's a good time for "opportunistic buying" (getting a deal on other chains' mistakes), too, but I'm less confident of that being a driver in toys when so many other "discount treasure hunt" chains get the same merchandise.

The truly bad news for those of us who rummage through the backs of the shelves looking for obscure finds is that they're improving their inventory system and trying to cycle stock through more efficiently, with fewer markdowns. 

Miss Hanzo toys with the tree as she imagines a world without heavily discounted J-Dolls.
Is it hopeless?
Nothing is hopeless to the dedicated doll-shopper. I check out the toy sections of grocery stores. However, the era of Tuesday Morning as a center of excitement in fashion-doll bargains may be over for a while, unless they decide to expand their private-label fashion-doll clone line.

Maybe I need a tree. I need a tree.
Transcripts are from


  1. That tree is so adorable and perfect for the desk. I don't have a Tuesday Morning around here and I've never been to one. I don't know what it's like there, but it's interesting to see that they're changing their strategy to create more sales and revenue.

  2. Great post! I love the little tree. It is adorable! I have never seen one so tiny. TM also has the cutest ornaments that looks like chandeliers. I have to go see if I can find that little tree.

  3. Haha, cute post. I've actually never been to a Tuesday Morning, but this post has me curious! Not really, I guess if their toy section is declining though, haha.

  4. I was sitting here wracking my brain why I knew that name and finally remembered that we had a Tuesday Morning store in CA near where I lived. I haven't set foot inside one since then. I don't think they have them here though and I never saw one in Washington state either.

  5. I will check out their seasonal stuff, but I think I'll also visit more often just in case they announce a closing.

    Thanks for the shout out!

  6. Sic transit gloria mundi. I guess that applies to great doll finds at Tuesday Morning as well. I wonder if anything will be done with the Tuesday Morning store that is nearest to me. The store atmosphere screams "cheap and rundown." I never found it pleasant to go into and only did so to look for those elusive dolly deals.

  7. Hmm very interesting. I have been to a Tuesday morning and bought my first J-Dolls there. I can't remember where it was, though. I will have to look it up to see if there are any still around here!