NEW YORK — Booming sales and new store openings ignited fourth-quarter and year-end results at specialty retailers Hot Topic and Chico’s FAS.
For both companies, strong comparable-store gains for the quarter were overshadowed by even larger contributions from scores of store openings as well as from acquisitions.
Fort Myers, Fla.-based Chico’s posted a 70.3 percent net income gain on sales that rose 55.8 percent to $215.5 million for the quarter ended Jan. 31. Comparable-store sales climbed 20.5 percent.
In a statement, Scott Edmonds, president and chief executive officer, lauded the company’s “bridge to a billion” strategy, which has included acquisitions of new businesses and expansion of its current operations.
“This year we expect to reach that lofty billion-dollar sales goal while maintaining operating margins that are at or near the top of the specialty apparel industry,” said Edmonds.
While comps were significantly higher, sales figures got their biggest lift from the September acquisition of the White House/Black Market company. The company brought 179 stores into the fold over the course of the year, 107 of being White House/Black Market units. According to management, the new stores increased total selling square footage by 45 percent, a figure which almost mirrors the gain in overall sales for the year.
“Our goal is to build the White House/Black Market brand to achieve the same customer recognition we have enjoyed with the Chico’s brand,” said Edmonds.
As a result of the majority of growth coming through acquisition, the firm was spared the costs of erecting new stores. In fact, while general, administrative and store operating expenses rose $89.6 million to $289.1 million over the year, the expenses remained a flat 37.6 percent of sales compared with the prior year.
As Edmonds also noted, the company was able to achieve success despite completing a transition to a new chief executive officer and incurring a $3.6 million charge related to the September closure of Pazo, the company’s 10-store juniors concept.
City of Industry, Calif.-based teen retailer Hot Topic experienced a similarly strong quarter and year. Net income rose 35.7 percent to $22.5 million in the quarter and 38.7 percent to $48 million in the year. Sales for the quarter and year soared 30.9 percent and 29.1 percent, respectively, with comps showing a gain of 8.5 percent.The lion’s share of sales gains for Hot Topic was also fueled by expansion. By year’s end, the company added 109 stores, bringing the total number of stores in operation to 554 compared with 445 in the year-ago period.
During the conference call Jim McGinty, chief financial officer, attributed 59 percent of the sales gain during the quarter to “new and noncomparable Hot Topic Stores” while only 25 percent came from comp stores.
What makes Hot Topic stand out from other specialty retailers in particular is what segment is stimulating growth. While discussing the 7.6 percent comp increase reported for the month of February, Betsy McLaughlin, president and chief executive officer, indicated that men’s was the best performing category, “led by the continued strong performance of novelty Ts.” According to McLaughlin men’s comps were up 16 percent while women’s tracked down 3 percent.
By the Numbers Chico's FAS.
For the period ended Jan. 31, 2004. Figures are in millions, except for per share data. Net income and per share figures are exclusive of special items.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye