Christopher & Banks Corporation (NYSE:CBK) Q2 2020 Earnings Conference Call - Final Transcript
Sep 11, 2020 • 08:30 am ET
Keri L. Jones
and monetizing inventory through our e-commerce channel. This is reflected in the accelerated growth in our e-commerce business to a 71% increase, with stores fulfilling roughly half of our online orders. As we mentioned last quarter with -- while receipts were down significantly, we had a large amount of seasonal inventory in transit that we needed to sell through, which resulted in merchandise margin pressure. Based on our current inventory position and our planned shipments per fall, we expect merchandise margin to be significantly less pressured in Q3.
On the expense side, the team has done an incredible job cutting costs, enabling us to achieve 20 basis points of leverage despite a 30% decline in sales. We also improved our cash position as a result of cost-cutting actions, working with partners on payment terms as well as securing a $10 million PPP loans.
We continue to work with our landlords on rent concessions and/or reductions. We are approximately halfway through these negotiations and we are pleased with our progress. We expect that this important work will be completed over the next 30 to 60 days.
Turning to our business operations. Leveraging the strong foundation that we built in the strategic plan we advanced over the course of the last two years, we were able to move quickly to adapt to the challenges brought on by the COVID-19 pandemic. This is most evident in the strong growth in our e-commerce business resulting from enhancements to our website and our expanded omni-channel capabilities. Within the past few weeks, we launched Buy online pickup in store at the item level. The significance of this change is that she can now see the purchase option earlier in her shopping journey, which drives her to select this choice more frequently. In a very short amount of time, we have seen BOPUS grow as a percentage of online orders and we believe that we're just scratching the surface on the potential of this option. As a refresher, this allows our customers shop online and pickup in store where we can help her add-on to her purchase or meet her at the door or a curb side if that's what she prefers.
Notably, we saw an increase in store customer shopping online for the first time. This number was higher than in our first quarter despite our store re-opening. As we said on our last earnings call, this is especially encouraging as we know that omni-channel customers tend to spend more over time than single-channel shoppers.
In addition, we also experienced dramatic growth in new online customers supported by our strategic investments in digital media. These trends bode well for the future as we expect the accelerated trends in digital shop -- shopping will continue well past COVID.
As part of our efforts to improve our website experience, we launched a new digital outfitting capability called Stylitics in mid-2June. This enables us to provide outfitting and style recommendations based on what the customer is viewing and purchasing