RGS
#Sure, so we were lucky enough to get Annette Miller.
And Annette started with us right after the first of the year.
She comes with a terrific background from Target, and has actually proven to be a great partner on the leadership team.
She's doing a lot of work around three areas.
She's working very hard on something that we call combo sales.
One of the things that we believe is a quick way to grow our retail business is that when somebody is in getting their hair cut, we want to make sure that they buy product.
She's come up with some very creative ways to help educate and incentivize the stylists.
She's also work on assortments.
We have pretty much a one-size-fits-all across our salons and she's been much, much more thoughtful about that.
Then also on inventory management, not only in our warehouse but at the salon level, making sure that we have the right in-stock on our best sellers.
We have a pretty good replenishment program, but again, it was sort of a one-size-fits-all.
So she's been very, very thoughtful about how we can drive retail with tools like that.
She's done a lot of good competitive assessments too on the category as a whole.
We need to give her time to put it in place.
As you know, with any kind of retailer you can't just make plans with your suppliers and change things the next day.
You need time to get it to work through the system, get the right POS in the salons.
I think the things that Annette and her team are doing are really thoughtful and will have a nice impact on our retail business over time.
We bought about just over 900,000 shares.
The average price was in the mid $14 per share range.
It's actually in our 10-K.
We don't actually spell out the exact amount, but actually throughout the year, as our execution has been improving in the salon, we've been seeing tremendous compliance from a cycle count perspective.
That's been through, the years, starting to give us a lead indication that our shrink rates were improving.
In the end of the year when we actually trued up the full book-to-physical, we saw the benefit of that.
It was the large impact that really helped our retail margins in the quarter.
We don't give guidance, but what I'll tell you is that we probably had some deminimus margin deterioration because of the mix of business, the combo versus retail only.
The combo ticket is a little bit lower.
Other than that, not much else.
I'll take that one, <UNK>.
Good question.
We have, over the last couple of years, really accelerated the growth of our franchise business for a couple of reasons.
We saw that there was an opportunity to protect markets that we were in.
We did see that there was also an opportunity to grow revenues out of that.
The franchise business today performs better than we do, so while we have hunkered down and focused on fixing the salons we have today, we have been growing the franchise business aggressively.
So, if I read between the lines and make sure that I get your question; if we were going to take a large number of our shares and convert them to franchise.
No, we believe that we can fix them.
We believe that ---+ we know that when we run a salon well, we generate an awful lot more cash flow from a salon we run well than we do from a franchise.
We think that we're an interesting hybrid.
We like both, but we believe that we can fix the base business and that we can generate a lot of cash as a result of fixing that base business.
Thank you.
We don't give guidance as to our cost structure, but what I'll tell you is a couple of things.
One, to the extent we are making investments or continuing to make investments next year, we're funding it through our cost structure.
So we're continually looking for ways within our own cost structure to offset the impact of future investments in our business.
But where we get the real leverage in the business is by growing.
I think when we suddenly see our business grow in that 1.5% to 2% range, that's when we begin to see leverage of growth.
Well, I won't speak about it from a guidance perspective, but what I'll tell you is minimum wage is, in the short term, what I would call our headwind and in the long term it's our opportunity.
In the short-term when we're not executing as well as we would like to be, a larger percentage of our stylists are not commissioning.
So as a result, when minimum wage goes up, it creates cost pressure for us.
In the long term, when all of our portfolio is executing as well as the half that <UNK> referred to earlier, a greater percentage of our stylists begin to commission, and then minimum wage becomes a theoretical argument because they are making more than minimum wage once they're hitting the commission scale.
Does that help.
It's a combination of the two; it's a mix.
What we are seeing, though, that once somebody gets into the online booking tool, be it through the mobile app or through the website, is they become a consistent guest.
It's a really easy way to get a service from Supercuts.
I think our marketing team did a great job building out both the website and the mobile app and we'll continue to bring improvements to that.
I saw some improvements yesterday that I was really excited about.
I think that, while we're pleased with where we are today, I think we're just scratching the surface of where we can go with that technology.
Okay, thank you, Cassandra, and thank you, everybody, for joining us today.
We look forward to talking to you again in a couple of months.
Have a great weekend.
