BARNEY’S NET JUMPS IN PERIOD
Byline: Melanie Kletter
NEW YORK — Barneys New York continued to show improvement in the third quarter, posting a substantial earnings gain and higher sales.
Profits in the quarter ended Oct. 30 climbed to $2.2 million, or 17 cents a share, from $94,000.
The year-ago period included $2.7 million in reorganization costs, according to a filing Tuesday with the Securities & Exchange Commission. Barneys emerged from bankruptcy proceedings in January.
Earnings before interest, taxes, depreciation and amortization and reorganization costs (EBIDTA) improved to $9.9 million from $7.4 million, Barneys said. The upscale retailer must file financial information because of its approximately 1,000 shareholders.
“We were particularly pleased with the success of our women’s accessory and men’s sportswear business,” said Allen Questrom, chairman, president and chief executive officer, in a statement.
Sales in the quarter were up 10.2 percent to $101 million from $91.6 million, the filing shows. Excluding sales from three outlet stores that closed in the period, same-store sales gained 11.2 percent, due primarily to a 10.7 percent gain in comp sales in its seven full-price stores. Barneys also operates nine outlet units.
Gross margins fell slightly to 46.9 percent of sales, from 47.5 percent last year, due to higher markdowns offset partially by the impact of greater foreign exchange gains.
Selling, general and administrative costs were reduced to 38.1 percent of sales from 40.4 percent, due primarily to better expense control and leveraging of expenses.
Depreciation and amortization surged to $4.3 million from $2.3 million in the prior year due to the amortization of the excess reorganization value. Interest expense increased to $3.5 million from $2.3 million.
In the nine months, Barneys cut its loss to $8.6 million from $15.7 million. The prior year included reorganization costs of $10 million. EBIDTA improved to $14.2 million from $10.1 million. Sales gained 5.1 percent to $263.5 million from $250.8 million, and comp sales rose 6.4 percent, excluding sales from four outlet stores that closed in the period. Included in the year-ago figures is $2.2 million generated from the full-price store in Costa Mesa, Calif., closed in July 1998.