NEW YORK — Bradlees Inc. said Tuesday it suspended its dividend, will delay store openings in 1996 and predicted a first-quarter loss.
On top of all the bad news, Standard & Poor’s downgraded its credit rating on the discounter. Bradlees said it hopes to replace its credit agreement with a larger, more flexible, asset-based facility before the end of 1995.
The company also said it expects to report a loss of $2.25 to $2.75 a share for the first quarter of 1995. Suspending the dividend is consistent with actions recently taken by other “challenged” retailers, chairman and chief executive officer Mark A. Cohen said in a statement. Delaying store openings in 1996 should help the company’s performance, he said. Six stores slated to be opened this year are on schedule, he added.
Standard & Poor’s Ratings Group lowered its rating on the company’s subordinated debt to Single-B-Minus from Single-B-Plus and placed the company on CreditWatch with negative implications. The corporate credit rating is Single-B-Plus. Total debt is $200 million.
S&P is concerned about Bradlees’s ability to fund working capital needs and potential violation of bank agreements.
Same-store sales dropped 3 percent in 1994 and 6 percent in the first quarter. Bradlees expects a similar trend in the second quarter, S&P said.