NEW YORK — Bon-Ton Stores and Elder-Beerman Stores, two of the larger regional department store groups in the U.S., managed to cut back on losses during the second quarter.
This story first appeared in the August 23, 2002 issue of WWD. Subscribe Today.
Bon-Ton nearly halved its quarterly loss while Elder-Beerman cut more than half from its deficit for the quarter. Both stores are among a dwindling group of regional chains that have been under considerable operating pressure in recent years. As reported, similar stress led bankrupt Jacobson Stores to begin liquidating its large-format specialty stores beginning last month.
At Bon-Ton, net losses totaled $1.6 million, or 10 cents a share, for the quarter ended Aug. 3. This compared with a year-ago loss of $3.1 million, or 21 cents.
Revenues, on both a comparable and total basis, tiptoed up 2 percent to $154.4 million from $151.4 million a year ago. The York, Pa.-based firm operates 73 department stores in the New England and mid-Atlantic states.
Gross margins increased by 100 basis points to 37.6 percent of sales while selling, general and administrative expenses were cut, also by 100 basis points, to 34.9 percent of sales.
“While encouraged by these results, we continue to focus on keeping inventory current and controlling expenses given the economic environment and the recent trend of conservative spending by the consumer,” said James Baireuther, vice chairman and chief administrative officer, in a statement.
So far this year, he added, retail inventories have fell 17 percent.
The first half saw losses shrink to $5.9 million, or 39 cents a share, from $8.1 million, or 54 cents, a year ago. Total and comparable sales for the 26 weeks rose 1.3 percent to $305.5 million from $301.6 million a year ago.
Dayton, Ohio-based Elder-Beerman Stores reported a net loss of $1.7 million, or 15 cents a diluted share. That compares favorably to last year’s net loss of $3.6 million, or 32 cents.
Second-quarter earnings included pretax income of $300,000 related to a store closing in Dayton, $200,000 in pretax income from the sale of some non-core assets, and another $400,000 in pretax severance costs related to cost reductions and management changes. Excluding those sums, Elder-Beerman would have reported a slightly greater net loss of $1.8 million, 16 cents.
Total revenues for the period rose 2.3 percent to $140.9 million from $137.8 million last year as comp-store sales fell 1.8 percent. The company currently operates 66 stores in eight Midwestern and Middle Atlantic states.
“During the second quarter we enhanced our direct marketing with a new customer-relationship management program and implemented a strong key-item merchandising initiative for the third and fourth quarters of 2002,” said chief executive officer Byron Bergren in a statement. “As previously announced, we successfully completed the renewal of our $270 million credit and securitization facilities during the second quarter, providing the flexibility and liquidity to execute our business strategies over the next few years.”
Overall, for the first half of fiscal 2002, Elder-Beerman reported a net loss of $19.3 million, or $1.70 a diluted share. That compares with last year’s loss of $3.8 million, or 33 cents. In the first quarter, the company adopted the new accounting standard regarding the amortization of goodwill. As a result, Elder-Beerman took a one-time after-tax charge of $14.1 million. Excluding that write-off, the company would have posted a more modest net loss of $5.2 million, or 46 cents.