Ollie\'s Bargain Outlet Hldg (OLLI)

History and Background

Ollie's Bargain Outlet was founded in 1982 in Mechanicsburg, Pennsylvania. It has grown from a single store to a chain of over 500 stores across the Eastern United States, known for its closeout and discounted merchandise.

Core Business Areas

• Retail Sales: The primary business segment involves selling discounted merchandise, including housewares, food, books, toys, and clothing. Ollie's operates on a 'closeout' buying strategy, purchasing overstocked or discontinued items from manufacturers and retailers.

Leadership and Structure

The current CEO is John Swygert. The organizational structure is typical of a retail chain, with regional managers overseeing store operations and a corporate headquarters managing purchasing, marketing, and finance.

Key Offerings

• Housewares and Home Goods: Includes items like kitchenware, bedding, and furniture. Market share for specific houseware items is fragmented but Ollie's competes with major retailers like Walmart and Target in this segment. Competitors: TJ Maxx, Ross Stores.
• Food and Candy: Shelf-stable food items, snacks, and candies are a significant draw. Ollie's competes with discount grocery stores and dollar stores. Competitors: Dollar General, Dollar Tree, Big Lots.
• Books and Toys: Discounted books and toys, including overstock from publishers and manufacturers. Competitors: Amazon, Walmart, Barnes & Noble.

Industry Overview

The discount retail industry is experiencing steady growth, driven by consumer demand for value and affordability, especially during economic downturns. The industry is highly competitive with many small companies and a few leading giants.

Positioning

Ollie's is positioned as a deep-discount retailer, focusing on opportunistic buying and cost control to offer lower prices than traditional retailers.

Total Addressable Market (TAM)

The total addressable market for discount retail is estimated to be over $80 billion in the US. Ollie's is capturing a small, but growing, portion of this market through store expansion and comparable sales growth.

Key Competitors

• Dollar General (DG)
• Dollar Tree (DLTR)
• Big Lots (BIG)

Competitive Landscape

Ollie's differentiates itself with a treasure hunt experience and unique product offerings. It competes with larger discount retailers on price, but its smaller store footprint and opportunistic buying strategy set it apart.

Historical Growth: Ollie's has experienced consistent store growth and comparable sales increases in recent years, driven by its value proposition and opportunistic buying model.

Future Projections: Analysts project continued store growth and moderate comparable sales increases for Ollie's in the coming years.

Recent Initiatives: Recent initiatives include expanding store count, enhancing the loyalty program (Ollie's Army), and improving supply chain efficiencies.

Ollie's Bargain Outlet is a discount retailer with a strong brand and loyal customer base. Its opportunistic buying model allows it to offer unique and compelling deals. However, its dependence on closeout merchandise and limited online presence pose challenges. Continued store expansion and strategic initiatives will be crucial for future growth.

Data Sources:

• Company SEC Filings (10-K, 10-Q)
• Investor Presentations
• Market Research Reports
• Analyst Reports

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Market share percentages are estimates and may vary. The AI-based rating is generated using an algorithm and is not a substitute for professional financial advice.