Cost Reductions:
The company has identified $80 million in annualized cost reduction opportunities expected to be realized over the next three years. Of this, $25 million will be driven by process improvements, inventory optimization and systems implementations associated with its go-to-market transformation. The other $55 million of expense reductions will be driven mainly by the previously announced workforce restructuring. These savings are incremental to the $50 million dollars in savings that were announced in 2016 and delivered over the past three years.
Fleet Rationalization:
The company expects to close approximately 100 stores by 2022. This includes nine stores that have already closed in 2019, 31 by the end of January 2020, and an additional 35 by the end of January 2021. The company expects the net impact to sales to be a reduction of $90 million by 2022. This reduction is offset by the elimination of the fixed operating costs of the closed stores and leveraging the remaining stores’ and online infrastructure for additional sales, which it expects to result in a $15 million annualized increase in EBITDA by 2022.