Cracks in the Foundation

I'm full of praise for the marketing strategies used by Duluth Trading Company. But you already knew that.

Now go read their Annual Report (click here).

Growth is generally coming via retail ... and profit as a percentage of sales is eroding ... still amazing for a traditional catalog brand expanding into retail ... but eroding.

You're seeing the first cracks in a sound foundation. Nothing to stress about, heck, most retailers would kill to have Duluth Trading Company performance.

But cracks are beginning to show. This is the inflection point (in a business) where things become really fun, the point where a smart Management Team gets to demonstrate their skills.