Mr. Sozzi: Just as a point of reference, last year we saw a sharp reversal in same-store sales midway through the year. But surprisingly, if you go back, most specialty retailers actually experienced strong double-digit sales increases in their online businesses. One, it's a function of a smaller sales base able to grow. Two, it reflects increased initiatives by management teams to drive awareness of online.
TWST: What is the ideal mix of online vs. in-store sales for a traditional retailer like Urban Outfitters or Target?
Mr. Sozzi: A good example would be Abercrombie & Fitch. Abercrombie last year generated 10.0% of their annual sales from their online business and that were pretty much on the high side within the specialty apparel sector. That's because Abercrombie operates five brands under their portfolio and each brand has its own distinguishable Web site. So for more traditional specialty apparel companies, you're looking at 4% to 6% of annual sales devoted to online, and you should continue to see that increase over the next two to three years, maybe closer to an Abercrombie, for example, as companies offer more unique merchandise online, and the economy recovers.
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