The Buckle has done away with the notion that Midwestern kids' fashion sense favors overalls. With some 430 mostly mall-based stores in 40-plus states, The Buckle sells fashion-conscious 15- to 30-year-olds the clothes they've just got to have. The company retails a variety of clothing items, including mid- to higher-priced casual apparel (pants, tops, and outerwear), shoes, and accessories. Its products portfolio boasts such brands as Lucky Brand Dungarees, Hurley, Roxy, Silver, Billabong, Fossil, and Ed Hardy. The Buckle operates under the names Buckle and The Buckle; it also has an online store. Born in Nebraska in 1948 under the name Mills Clothing, the chain has expanded into the South and West.
The Buckle topped a billion in sales in fiscal 2012 (ends January), a 12% increase compared with the prior year. Net income grew by more than 12%and cash flow increased as well over the same period. Indeed, the retail chain's sales have doubled over the past five years as it sailed through the deep recession that punished some of its rivals (notably Abercrombie & Fitch). Same-store sales for the fiscal year increased more than 8% as its stores sold more goods at higher prices.
The Buckle is growing by adding stores (135 over the past decade) and entering new markets (most recently Massachusetts and Rhode Island). Another 10 stores are planned for fiscal 2013. Its stores can be found in strip centers, enclosed shopping malls, and large lifestyle centers, as well as free-standing downtown locations. On the merchandise side of the business, Buckle and other retailers have grappled with rising costs for labor and commodities -- especially cotton. CEO Dennis Nelson expects rising cotton costs to impact sweaters and outerwear more than denim. Denim (47% of fiscal 2012 sales) is increasingly popular with Buckle customers and is a key component of the retailer's merchandising strategy. Unlike competitors Gap and Abercrombie & Fitch, the teen retailer relies heavily on hip brand-name clothing, which generates about two-thirds of its sales; the rest comes from private labels, with BKE being the most notable. Brand names are big among its youthful clientele, which tends to be fickle and chases after the "it" brands of the moment. Also, because the majority of the company's stores are in smallish markets in middle America, The Buckle is the leading edge of fashion for many of its customers. The chain also moving "down market" to appeal to the younger set -- children ages 8 to 15 -- with apparel only sold online.
Chairman Daniel Hirschfeld, the founder's son, owns more than a third of The Buckle's shares. The New York-based investment firm Royce & Associates, LLC owns nearly 15%. – less
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