Claire’s Stores Inc. has experienced same-store sales growth in May following a first quarter marked by lower sales and margins and a deeper loss.
The Chicago-based retailer of accessories and jewelry for younger women, privately held since being acquired for $3.1 billion by Apollo Management in 2007, reported a net loss of $19.9 million during the three months ended April 28, higher than the loss of $19.6 million logged during the 2011 quarter. Adjusted EBITDA, excluding management fees as well as interest, taxes, depreciation and amortization, declined 2.9 percent to $50.5 million from $52 million.
Sales declined 1.7 percent to $340.6 million from $346.4 million as same-store sales fell 3 percent in local currencies. North American comps dropped 1.7 percent while those in Europe were off 5.5 percent. Gross margin was 48.9 percent of sales versus 50.5 percent in the year-ago quarter.
The severity of the loss was mollified by a 6.4 percent reduction in selling, general and administrative costs, to $118.6 million from $126.7 million. Cost of goods sold rose 1.5 percent to $174 million.
“Our second-quarter-to-date same-store sales performance is currently in the low positive single digits,” Jay Friedman, interim co-chief executive officer, said Wednesday on a conference call to discuss the results. “We’re encouraged to see sequential improvement in jewelry performance throughout the first quarter and into the second quarter, which is helping the overall second-quarter same-store sales trend.”
While European business was difficult throughout the first quarter of the year, “our results improved in the latter part of the first quarter and have continued into the first few weeks of the second quarter,” he noted.
James Conroy, chief operating officer and co-ceo, pointed out, “Over the past few months, we’ve begun to revitalize our emphasis on growing the jewelry categories to complement our focus on growing the accessories business over the past several seasons. While individual categories within both merchandise divisions will continue to grow and contract with the fashion cycle, we believe that we need to rebalance our perspective and recapture some of the sales opportunity in jewelry.”
Claire’s has been without a ceo since the January departure of Eugene Kahn, former ceo of May Department Stores Co., after a five-year tenure dating back to the Apollo acquisition. The company declined to comment on the progress of its search to replace Kahn.
At the end of the quarter, long-term debt stood at $2.4 billion, up from $2.39 billion at the start of the fiscal year.
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