Dover Saddlery is the brainchild of former United States Equestrian 3-Day Event Team member Jim Powers, who saw the stark demand back in 1975 (after a strong impression at the '72 Olympic Games) among equestrian riders in New England and elsewhere, who wanted a comprehensive source for low-cost, high-quality equipment (including specialty), expertise, and services in the English-style riding space.
Powers came out of a solid background in equestrian arts, having worked with and competed against some of the top riders on earth, founding Dover with an initial retail outlet in Wellesley, Massachusetts. The company has since grown into the premier upscale provider of the most sophisticated selection of equestrian products available today and is known throughout the riding market for this distinctive suite of offerings via beloved identities such as The Source®, Dover Saddlery®, and Smith Brothers®. With an amazing line up of some of the best equestrian apparel from recognized brands like Ariat, Kerrits®, SSG®, Tailored Sportsman, and Tuff Rider™, Dover has become the de facto standard in product selection by which all others are measured.
The company's 35-year track record for providing excellent tried-and-tested products, handpicked by extremely knowledge riders, or, where no product exists, developed by the company to meet demand, has created a loyal customer following (86% customer retention rate and 90% satisfaction in product/quality and service ratings). With some 9.2M horses in the U.S. and around $5.7B spent annually on various products, we have a very stable core consumer group who, if they are into equestrian activities at all, are solid, repeat customers.
Today, Dover has a much more extensive retail network, with abundant market presence via its brands, product selection, catalog footprint (6k items), intuitive e-commerce sites, and overall internet footprint (3M+ unique visitors). The retail strategy (currently 15 locations) is focused largely on expanding along the same lines that led to the success of the initial location; namely, identifying key locations with a localized market that is heavily into equestrian activities and also bears the capital conditions to support organic growth.
But for Dover, it goes way beyond knowledgeable personnel and a superior product catalog delivered via an advanced multi-channel (direct/retail/etc.) strategy that taps into a huge proprietary database of over 2M riders. The company's experts intrinsically understand the needs of the rider and are able to provide that extra special touch when it comes to satisfying customer requirements. Customers can call, email, and chat online with Dover personnel to find the best in everything from horse medicine and stable supplies, to exemplary lungeing equipment, Riders International horse blankets, and even elegant bridlework. Just look at the US Rider Equestrian Motor Plan that caters to the special needs of equestrian event participants and the like, offering 24/7 roadside assistance for the customer and their horse(s) through the U.S., Canada, and Alaska. This company knows the target market and grew out of intimate perceptions based on first-hand experience - these fundamentals are extremely important when valuing Dover as an investment.
The company generously extends a no-hassle, any-time, any-reason guarantee of money back on the products, and customers can sign up to get a free catalog or shop online at the company's main site: www.DoverSaddlery.com
It is the unique array of items and the capacity to provide even custom-tailored apparel/accessories that make the company stand out through its multi-channel presence. The core of the business stems from apparel like helmets, breeches, gloves, and show clothing, as well as boost/chaps and a variety of horse tack (saddles, bits, halters, leads, stirrups, and a vast assortment of similar products, all chosen to meet every need of the equestrian enthusiast). When you have such a wide product selection backed up by personnel that are themselves active riders, who have an in-depth understanding of the horses and equestrian sporting in general, the results are not difficult to predict. Dover has indeed turned in the kind of positive baseline economic metrics we should expect (reported May 14):
• Net Income for Q1 2012 was up 76.7% to $221,000 ($0.04/share) compared to 2011
• Retail Revenues also increased 30.8% to $6.8M in Q1
• Total Revenue was up 5.8%, to $18.3M for the three-month (ended Mar 31, 2012)
• Gross Profit for the three-month was up 7.5% to $0.5M
Despite hampered dynamics in the retails area linked to the global economic crisis, the extensibility of the Dover model has proven to be quite effective, allowing the company to open two additional retail locations in 2011 as per the defined retail growth strategy. This strategic roll out of the physical locations has really benefited from the core values, just like the product selection's appeal has; the Dover people really know the market and they know where the best towns/locations are to start these shops.
Superb target market/product synergy, excellent position earned via a long, stable operational track record, clean financial vectors, and ultimately the most comprehensive grasp of what is required to sustain/thrive in the space set Dover apart from the competition. That competition is largely fragmented, consisting of some 10k or so small tack shops of various kinds and less than 14% even use direct marketing to engage consumers. Nearly half the competitors in this space don't even have a website, while Dover's own main site (www.DoverSaddlery.com) was named among the Top 50 Retail Web Sites by Internet Retailer Magazine, placing them in great company alongside high-profile names like Nordstrom and BassPro.
The average Dover customer is female with a higher than average household income and generally expresses strong brand loyalty/brand preference. Ideal dynamics for the powerful mix of direct/retail marketing and it is widely recognized that the multi-channel customer typically buys more as well.
To learn more about Dover, visit the company's investor relations site at http://investor.shareholder.com/dovr
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