NO SWITCHING: J. Crew on Wednesday denied an accusation from a former employee that it was pumping up its catalog division by covering its costs with its stores’ division. Aside from saying the charge wasn’t true, J. Crew added there would be no point in shifting the costs since the company does not break out profitability by division. “The charges made against J. Crew by a former employee are irrelevant and baseless,” the company said in its statement. “As anyone who understands our business knows, we do not report profitability by division. Equally important, no cost shifting has occurred, and there would be no advantage to the company in doing so for the reason stated above.” It also said, “Perhaps not surprisingly, the company has not received any notice from the SEC about any potential claim or investigation.” Press reports Tuesday said a former J. Crew order consultant, Charles Sayler, wrote a letter to the Securities and Exchange Commission that said J. Crew was paying catalog expenses from retail accounts.
BURBERRY BUZZ: Burberry said total sales rose 12 percent in the first quarter ended June 30 and, eliminating the effects of currency fluctuation and recent acquisitions, were up 5 percent for the period. The company said in a statement that total retail sales rose by 20 percent due to new store openings and sales growth at existing stores. Licensing revenue increased by 13 percent — pushed by the strong growth in Japanese royalties — while wholesale sales rose 4 percent. As reported, Burberry is expecting wholesale sales for the fall 2002 season to be flat against last year. Burberry shares fell 12 cents, or 3.6 percent, Wednesday to close at $3.26 on the London Stock Exchange as the FTSE 100 dropped 0.8 percent. Burberry and its majority owner, GUS PLC, will release profits and sales data for the first half of the year in November.
OVER AND DONE: Federated Department Stores said Wednesday that it has completed the sale of Fingerhut assets to FAC Acquisitions, which is owned by former Fingerhut chief executive officer Theodore Deikel and wholesale distributor Thomas J. Petters. Terms of the transaction were not disclosed. Included in the deal, however, are certain facilities in St. Cloud, Minn.; Fingerhut’s corporate headquarters in Minnetonka, Minn.; the Fingerhut name, customer lists, Web site and existing inventory, and other properties in Plymouth, Minn. and in Piney Flats, Tenn. Fingerhut receivables were sold to CompuCredit Corp.