NEW YORK — Aided by tighter expense controls, Barneys New York Inc. reversed direction in the first quarter and bounced back into the black after year-ago losses.
Net income of $478,000, or 3 cents a share, for the three months compared to year-ago losses of $3.3 million, or 24 cents.
Sales for the period ended May 4 slid 1.7 percent to $92.5 million from $94.1 million a year ago. Comparable-store sales dipped 1.4 percent.
Results came to light in a Form 10-Q filing with the Securities and Exchange Commission Tuesday.
Gross margins for the period held steady while selling, general and administrative expenses were reduced by 130 basis points to $38.3 million, or 41.4 percent of sales.
Workforce reductions during the last fiscal year represented $1.3 million, or almost 68 percent, of the overall SG&A savings. The remaining $600,000 was attributed partially to the reduction in sales volume and expense reduction initiatives including the rebidding products and services, and general cutbacks in office supplies, telephone usage, training and travel.
Long-term debt was cut 29 percent to $57.6 million over the course of the quarter. At the close of the period, Barneys had $16.6 million in unexpired letters of credit under its credit agreement.
According to the filing, the firm obtained after the close of the quarter commitments for a new credit facility totaling $105 million from certain members of its current agreement, which matures in February. The new facility, expected to be in place within the next two months, will have a maximum term of three years and contain financial covenants relating to net worth, earnings and capital expenditures.
During the quarter, capital expenditures totaled $3.6 million and were used primarily to reconfigure and improve existing locations, including the expansion of the cosmetics and women’s accessories businesses at its flagship store here. The firm also opened one new full-price store. Due to restrictions in its credit agreement, capital expenditures may not exceed $5 million annually.
Barneys, based here, markets upscale apparel through full-price and outlet stores as well as warehouse sale events.”