SPIEGEL TO END DIVIDEND
Byline: Jennifer Brady
NEW YORK — Spiegel Inc., which has been in the red for three quarters, said Wednesday it plans to eliminate its quarterly cash dividend.
The catalog firm and specialty retailer said in a statement, “In evaluating our current dividend practice, the directors decided that it was in the best interest of the company and its shareholders to dedicate these funds for strategic growth programs.”
A spokeswoman said part of Spiegel’s growth strategy is continued expansion of Eddie Bauer stores, and there are plans for 30 to 40 openings in 1996. The company currently operates 411 Eddie Bauer units.
Spiegel, based in Downer’s Grove, Ill., last paid a quarterly dividend of 5 cents a share on Oct. 27, and had been paying a cash dividend since 1988. Spiegel stock down 5/8, at 7 1/4, in over-the-counter trading Spiegel said it will continue to evaluate its dividend practice. Walter Loeb, an analyst at Loeb Associates, said that while cutting the dividend “does not signal any kind of major problem,” it does suggest the fourth quarter was no better than the third.
“Catalog firms in general, and Spiegel in particular, had a very difficult time this year,” Loeb said. “It is prudent for them to cut back and preserve their resources for 1996.”
Spiegel’s pretax loss reached $40.1 million in its latest quarter, ended Sept. 30, reflecting increased delinquencies in its credit card business, weak apparel spending and significantly higher catalog production costs. In the year-ago quarter, Spiegel earned $2.8 million, or 3 cents a share. Sales moved up 5.6 percent to $685.9 million.
In the latest nine months, the company lost $46.9 million, while sales edged up 6.1 percent to $2.06 billion.
Spiegel’s catalog operations include Spiegel, Newport News, E Style and For You From Spiegel. — Fairchild News Service