Syms Inc. posted third-quarter profits of more than $25 million, almost all of it attributable to an insurance payment related to the death of founder Sy Syms.
For the three months ended Nov. 28, the Secaucus, N.J.-based off-price retailer recorded net income of $25.6 million, or $1.76 a diluted share, versus a loss of $891,000, or 6 cents, in the comparable 2008 period. The more recent period includes a gain of $24.8 million from insurance proceeds related to the November death of Sy Syms, who started the company 50 years ago.
Sales in the period more than doubled, to $135.2 million from $64.3 million, because of the June acquisition of 23 stores and related assets of Filene’s Basement, which had been in bankruptcy. Same-store sales, including only units operating under the Syms nameplate, declined 9.9 percent during the quarter.
Gross margin rose to 42.8 percent of sales from 41.4 percent in the year-ago period.
“The company has been rebuilding inventory levels to support planned sales growth,” the firm said.
Year to date, net income, including the insurance proceeds, hit $15.7 million, or $1.08 a share, versus a loss of $1.5 million, or 11 cents, in the first nine months of 2008. The most recent figures include $4.7 million in acquisition costs as well as a one-time gain of $9.7 million to account for the fair market value of the Filene’s acquisition over the purchase price of $62.4 million.
Bolstered by its ownership of Filene’s for more than five of the nine months, revenues increased 39.3 percent to $261.9 million from $187.9 million. However, same-store sales were off 17.8 percent.
“The decrease in same-store sales is attributable to declines in store traffic commensurate with recessionary trends in the U.S. economy,” the company stated.
Marcy Syms, president and chief executive officer of the company, was also named chairman, a position last occupied by Sy Syms, her father.
With the addition of the Filene’s stores, Syms operates 53 off-price apparel stores.