NEW YORK — The losses keep coming for multichannel retailer Delia’s Corp.
This story first appeared in the June 5, 2003 issue of WWD. Subscribe Today.
Less than a month after reporting a $12.4 million fourth-quarter loss and a $19 million loss for the full year, Delia’s said its net loss for the first quarter ended May 3 hit $7.3 million, or 16 cents a share, including charges and fees related to its recent licensing and financing arrangements totaling $1.2 million on a pretax basis and 3 cents a share after taxes. In the year-ago quarter, Delia’s had net income of $11.1 million, or 25 cents a share, after a $15.4 million aftertax benefit from the effect of an accounting change. Excluding interest, taxes, depreciation, amortization and professional fees, the loss grew to $4.3 million from a $2.8 million deficit in the earlier quarter.
Sales for the three months inched up 2.4 percent to $29.5 million from $28.8 million in the prior year. Retail sales increased 21 percent, driven by new store openings. Direct sales decreased 12 percent on a 22 percent reduction in circulation.
Delia’s has been fighting battles on several fronts at once in recent seasons as it’s been plagued by product and planning miscues on one hand and severe fiscal challenges on the other.
“We now believe that we are well positioned from an overhead, brand and product perspective,” chief executive Stephen Kahn said in a statement regarding the back half of 2003. “We believe our turnaround is well on track.”
In order to meet Securities and Exchange Commission regulations and report fourth-quarter and yearend results without auditor qualification, Kahn and other members of Delia’s management made a $2.7 million equity investment in the firm and inked a standby agreement to buy the firm’s distribution center in Hanover, Pa., if other arrangements can’t be made before the maturity of the facility’s $42.9 million mortgage on Aug. 6.
Also, last month, Delia’s was notified by Nasdaq that it was subject to delisting because of its low share price. Over the past 52 weeks, shares of Delia’s have traded as low as 22 cents, reached Feb. 7, and, with the exception of several spikes in the past week, have remained below $1 since the severity of its ills became apparent last October. The 52-week high of $5.90 was reached last June 5.
Wednesday, shares closed at 82 cents, down 5 cents, or 5.8 percent.
Earlier this year, it amended its existing loan with Wells Fargo Retail Finance and received $16.5 million in cash against future royalties to be gleaned from the licensing of its name to an affiliate of Schottenstein Stores Corp.