5 12 True True Religion Stockholder Letter W Sig
To Our Stockholders,
From the early days of True Religion Brand Jeans, our strategy has been anchored to three objectives: continuously bring innovative, trendsetting jeans and related sportswear to fashion conscious consumers; balance our sales between retail and wholesale channels; and connect with consumers around the world. Since the second half of 2008, the retail environment for premium jeans experienced unusual changes, with retailers attempting to anticipate the tastes of consumers who were faced with continuous unsettling news. Through a tumultuous 2009, our Company maintained its strategy and delivered double digit sales and operating income increases. In addition to achieving the highest annual net sales and net income in our Company’s history, we also strengthened our balance sheet with a $48 million increase to our cash and cash equivalents balance. Those results support our strategy and foreshadow the opportunity for True Religion Brand Jeans.
We made significant strides in our consumer direct segment during 2009, with 71 percent growth in net sales and 61 percent growth in operating income. We opened 28 branded stores in 2009, ending the year with 70 stores. Our consumer direct segment, which became our largest segment in 2009, is key to maintaining control over our brand equity and provides incremental operating margin to our business.
Our U.S. wholesale segment took the largest hit from the downturn in the U.S. economy as our wholesale customers shifted their on-hand assortment to lower-priced styles. U.S. wholesale sales declined 20 percent in 2009. The wholesale customers provide significant retail presence to our brand, and we have restructured our sales team and are taking steps to partner with retailers more closely to reverse this trend.
We view international expansion as one of the most attractive growth opportunities given the expanding worldwide demand for the True Religion Brand merchandise. In 2009 our international net sales
increased
From the early days of True Religion Brand Jeans, our strategy has been anchored to three objectives: continuously bring innovative, trendsetting jeans and related sportswear to fashion conscious consumers; balance our sales between retail and wholesale channels; and connect with consumers around the world. Since the second half of 2008, the retail environment for premium jeans experienced unusual changes, with retailers attempting to anticipate the tastes of consumers who were faced with continuous unsettling news. Through a tumultuous 2009, our Company maintained its strategy and delivered double digit sales and operating income increases. In addition to achieving the highest annual net sales and net income in our Company’s history, we also strengthened our balance sheet with a $48 million increase to our cash and cash equivalents balance. Those results support our strategy and foreshadow the opportunity for True Religion Brand Jeans.
We made significant strides in our consumer direct segment during 2009, with 71 percent growth in net sales and 61 percent growth in operating income. We opened 28 branded stores in 2009, ending the year with 70 stores. Our consumer direct segment, which became our largest segment in 2009, is key to maintaining control over our brand equity and provides incremental operating margin to our business.
Our U.S. wholesale segment took the largest hit from the downturn in the U.S. economy as our wholesale customers shifted their on-hand assortment to lower-priced styles. U.S. wholesale sales declined 20 percent in 2009. The wholesale customers provide significant retail presence to our brand, and we have restructured our sales team and are taking steps to partner with retailers more closely to reverse this trend.
We view international expansion as one of the most attractive growth opportunities given the expanding worldwide demand for the True Religion Brand merchandise. In 2009 our international net sales
increased