The Downers Grove, Ill.-based catalog retailer reported a fourth-quarter net loss of $378.1 million, or 14 cents a diluted share, compared with net income of $65.4 million, or 17 cents, in the year-ago period.
Net sales for the quarter ended Dec. 29 sloughed off 14.6 percent, to $920.9 million from $1.08 billion last year.
In an effort to stanch the bleeding, Spiegel said it will sell its credit card unit in order to concentrate on restoring its core business. Spiegel reported an aftertax net loss of $85.7 million, or 65 cents, from discontinued operations reflecting its loss of the private label and bankcard operations.
“Our fourth-quarter results were extremely disappointing,” said chief executive officer Martin Zaepfel in a statement. “Although the economic downturn clearly impacted our ability to stimulate sales, weakness in our merchandise offer and marketing programs also contributed to the lackluster sales performance, particularly in our Eddie Bauer division. During the fourth quarter, we planned for Eddie Bauer’s new brand positioning and revamped product offer to deliver higher sales productivity. While expectations were lowered based on the difficult economic conditions, customer acceptance was obviously lower than expected.”
Eddie Bauer’s net sales took a 14.8 percent tumble in the quarter, dropping to $571.3 million from $670.3 million last year. The division’s fiscal 2001 sales declined a slightly more modest 8.6 percent, to $1.6 billion from $1.75 billion, in fiscal 2000. Eddie Bauer expects to close approximately 45 apparel stores and open five.
Overall, Spiegel reported a net loss of $397.7 million, or 13 cents a diluted share, for the year, compared with net income of $120.8 million, or 7 cents, in the previous year. Sales fell 9.1 percent, to $2.78 billion from $3.06 billion in 2000.