New York & Co. is sharpening its pencils in preparation for job and other cuts.
The New York-based specialty retailer said it is planning to realize between $9 million and $10 million in annual payroll and related costs and about $1.5 million in the fourth quarter after engaging a global business advisory firm to analyze its practices and organizational structure. It expects to incur a charge of about $2.2 million for severance and related costs during the fourth quarter and plans to provide more detail on the restructuring when it reports fourth-quarter and full-year results.
“We expect the implementation of the cost and efficiency initiatives that have been identified will enable us to become a more agile company, with our resources focused on higher-growth and higher-return areas of our business,” said Gregory Scott, chief executive officer, specifying outlet stores and omnichannel as important opportunities. E-commerce registered a double-digit increase in the third quarter, he noted, with online exclusives in pants, denim and dresses performing particularly well.
The company disclosed its plans as it announced third-quarter financial results. In the three months ended Nov. 2, the firm’s net loss grew to $9.7 million, or 15 cents a diluted share, from a loss of $3.4 million, or 5 cents, in the year-ago period. Eliminating nonrecurring items, the adjusted loss per share was 11 cents, 2 cents better than the 13-cent loss expected, on average, by analysts.
Revenues declined 3.4 percent to $210.3 million from $217.6 million and were off 3.4 percent on a same-store basis. The sales number matched analysts’ consensus estimates.
In his discussion of the sales decline, Scott cited a “soft performance in our wear-to-work category” and West Coast port delays.
“We experienced positive traffic and increases in our average unit retail, which validates that our brand is strong and our marketing efforts are resonating with consumers,” Scott said, adding that sales trends in November were better than those in the third quarter.
Gross margin declined to 27.2 percent of sales from 28 percent a year ago, while inventories were up 1.4 percent to $124.8 million.