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Thinking Smaller at Stein Mart

NEW YORK — Stein Mart Inc. will unveil a trimmer store concept this fall under the Collections of Stein Mart banner.<br><br>The Jacksonville, Fla.-based retailer disclosed plans as they reported that disappointing sales pushed earnings down 9...

NEW YORK — Stein Mart Inc. will unveil a trimmer store concept this fall under the Collections of Stein Mart banner.

The Jacksonville, Fla.-based retailer disclosed plans as they reported that disappointing sales pushed earnings down 9 percent to $2.8 million from $3 million a year ago. In both periods, earnings per share were 7 cents. Sales for the period ended Aug. 3 advanced 6.8 percent, to $311.4 million from $291.5 million a year ago, as comparable-store revenues slid 2.3 percent.

So far this year, the 263-unit chain has opened 13 new doors and plans for three more this fall, one of which will be a Collections of Stein Mart prototype store in the Rolling Hills Estates section of Palos Verdes, Calif.

Featuring selections from the firm’s boutique, women’s sportswear and accessories, men’s sportswear and shoes as well as some gift and home decor offerings, the collections concepts will weigh in at about 15,000 square feet.

“With a more tightly focused assortment, we can enter resort and premium real estate areas that may not have been able to accommodate our typical 36,000-square-foot store,” said chief executive Jack Williams in a statement.

A spokeswoman added that Stein Mart plans to have three to five of the locations up and running by mid 2003. The firm didn’t project the effect of the new concept on sales or earnings. “This is a test situation, so we really want to get a few of them under our belt before we can say how many we can get out there,” she said.

Commenting on Stein Mart’s earnings and outlook, Williams said: “Our productivity initiatives of inventory management and expense control helped offset second quarter’s disappointing sales. Merchandise inventories remain below last year’s levels on an average store basis; continued inventory control and correspondingly lower markdowns should produce improved gross profit in the second half.”

“Across-the-board” strength in August has helped comps trend ahead of plan and turn “slightly positive” for the month, the spokeswoman told WWD. In July, the firm posted a 7.8 percent same-store sales decline.

Gross margins for the quarter shifted up 40 basis points to 25.1 percent of sales. However, selling, general and administrative expenses increased 80 basis points to 24.5 percent of sales.

During the half, earnings jumped 16.1 percent to $14.1 million, or 34 cents a diluted share. This compared with year-ago profits of $12.2 million, or 29 cents. Revenues for the six months were up 9.7 percent to $667.4 million from $608.5 million a year ago, as comps dipped 0.6 percent.

The firm is looking for losses of 5 cents a share in the third quarter and earnings of 35 cents in the fourth, resulting in EPS of about 65 cents for the year. A 3 percent comp increase is expected in both the third and fourth quarters.

Separately on Tuesday, Equity One announced that Stein Mart had leased a 41,000-square-foot store at the Oakbrook Square shopping center in Palm Beach Gardens, Fla. The site had previously been occupied by Jacobson’s Stores Inc. which, as reported, is in the process of liquidating.