Tile Shop lowers build-out costs; debuts new digital tool

The Tile Shop is on a roll.



The chain on Tuesday reported an 8.2% increase in same-store sales for the second quarter, along with a 20% reduction in new store buildout costs. The retailer also said it is launching an in-store and online tool that allows customers to personalize and visualize how an entire room or a distinct space will look upon completion of a project.



The Tile Shop, which sells manufactured and natural stone tiles, setting and maintenance materials and related accessories, said net sales in the second quarter grew 11.3% to $84.3 million. Net income totaled $6.8 million, topping expectations.



The company opened three new stores in the second quarter of 2016. It said that its last six store openings had capitalized build-out costs that were approximately 20% lower than the historical $1.4 million investment to build a store.



“A significant amount of time and effort has been placed against reducing the capital outlay associated with our new store openings,” said Chris Homeister, CEO, The Tile Shop, which operates 117 stores in 31 states. “Our latest openings give us confidence in building new stores that require a significantly lower average capital investment. This meaningful improvement will benefit our future cash flows and return on capital while providing the same premium shopping experience we have always delivered to our customers.”



New Digital Tool: The Tile Shop’s new digital tool, The Design Studio, gives customers and sales associates a collaborative platform to create customized 3D design renderings to scale. It allows shoppers to input their specific room dimensions, choose from an extensive selection of The Tile Shop’s tile and stone products, trim and grout, visualize various tile layout possibilities and select accompanying furniture and accessories.



No appointment is necessary, and shoppers can access the Design Studio with the help of a store associate at any of The Tile Shop’s stores or independently online via a tablet, desktop or mobile device.



“With our new design tool, we have significantly improved our capability to simplify the design process for our customers while also bringing their customized ideas to life in an innovative way,” said Homeister. “Design Studio creates an all channel, collaborative experience between homeowners, our sales associates and any trade professionals involved with a project.”