BRADLEES IN RED FOR FIRST QUARTER

NEW YORK--Bradlees Inc. reported a first-quarter loss of $43.7 million before interest, taxes and reorganization items on a 10.8 percent drop in sales from last year. The 124-unit chain, though, said it was encouraged by a healthy increase in its gross margins.
"Despite lower than anticipated sales resulting from difficulties in promptly offsetting discontinued merchandise categories, unfavorable weather conditions and delayed implementation of store-closing sales, our gross margin rate was well above last year and plan for the quarter," Mark A. Cohen, chairman and chief executive officer, said in a statement Friday.
Gross margins in the quarter rose to 29.3 percent of sales from 25.4 percent.
"This increase was primarily due to improvements in the assortment and quality of our merchandise in apparel and decorative home that are a primary focus of [our] merchandising strategy," Cohen added.
The Braintree, Mass.-based discounter, reorganizing under Chapter 11, said $2.5 million in interest and debt expenses and $7.5 million in reorganization charges put the net loss in the quarter at $53.7 million. Last year, $9.7 million in interest and debt expenses and a $22.5 million income tax benefit put the net loss at $32.4 million.
Sales fell to $349.9 million from $392.4 million, while same-store sales declined 12.6 percent.

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