Claire’s Stores Inc. lost almost $570 million in the fourth quarter because of impairment charges and falling consumer spending.
This story first appeared in the April 24, 2009 issue of WWD. Subscribe Today.
For the quarter ended Jan. 31, the Pembroke Pines, Fla.-based accessories chain said Wednesday it lost $569.5 million compared with net income of $15.3 million in the comparable year-ago period.
The results included pretax charges of $297 million for goodwill impairment and $227 million for intangibles and assets impairment. Excluding one-time items, earnings before interest, taxes, depreciation and amortization fell one-third to $76.4 million from $114.7 million in the comparable quarter of 2007.
Revenue in the three months fell 12.2 percent to $393 million from $447.4 million a year ago. Same-store sales declined 7.2 percent in the quarter.
“The economic turmoil that continued through the third quarter worsened in the beginning of the fourth quarter and definitely impacted sales as traffic softened and the customers stayed away from nearly any shopping experience,” chief executive officer Gene Kahn said on a conference call with investors.
Kahn said first-quarter same-store sales have been slightly negative, an indicator that sales are stabilizing.
Apollo Management LP acquired Claire’s in 2007. Though the company is no longer publicly traded, Claire’s reports quarterly results because it holds public debt. As of a Jan. 31, the company reported long-term debt of $2.37 billion versus $2.36 billion a year ago.
The accessories retailer closed 120 stores in the fourth quarter and opened 15.
For fiscal 2008, Claire’s posted a loss of $643.6 million compared with a loss of $43.1 million in the previous 12 months, which included pre- and post-acquisition figures. Sales fell 6.5 percent to $1.41 billion from $1.51 billion.
In other company news, Jim Conroy was promoted to president on April 16. He had been executive vice president since 2007.