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NEW YORK — Sales slumped in the third quarter, but comparisons to year-ago charges allowed Reeds Jewelers Inc. to narrow its loss.

This story first appeared in the December 23, 2002 issue of WWD.  Subscribe Today.

For the three months ended Nov. 30, the Wilmington, N.C.-based jewelry retailer reported a net loss of $692,000, or 8 cents a diluted share. That compares favorably with last year’s loss of $9.1 million, or $1.07.

The prior-year loss was compounded by asset impairment and restructuring charges totalling $10.8 million. Excluding those items, last year’s loss would have been a more moderate $1.7 million, or 20 cents.

The shuttering of 19 stores to 96 from 115 last year caused quarterly sales to fall 11.7 percent to $21.8 million from $24.7 million. In a bright spot, comparable-stores grew 5.2 percent.

Other positive indicators included a gross margin gain of 100 basis points to 49.4 percent of sales from 47.1 percent a year ago, and lower costs as selling, general and administrative expenses dropped 210 basis points to 49.7 percent of sales from 51.8 percent a year ago.

Overall, for the first nine months of the year, Reeds lost $3.1 million, or 37 cents a diluted share. That compares with a year-ago loss of $13.2 million, or $1.56.

Excluding restructuring and asset impairment charges in the year-over-year periods, the firm would have recorded net losses of $3 million, or 35 cents, versus $6.8 million, or 80 cents, a year ago. Sales for the first three quarters decreased 9 percent to $62.1 million from $68.3 million, as same-store sales rose 3.1 percent.