COUNTER PUNCH

DAYTON HUDSON DEBT WATCH: Duff & Phelps Credit Rating Co. placed its rating of Dayton Hudson Corp.’s long-term debt on Rating Watch-Down this week. The ratings agency said it rated the Minneapolis-based department store’s $4.9 billion unsecured debt single-A-plus.
The rejuvenation of Mervyn’s, DH’s middle-market department store chain, continues to be a major challenge, Duff & Phelps said.
The agency noted that a new merchandising strategy emphasizing more national brands and an improved selling environment is in place. However, given the weak retail environment and the sluggish California economy, where Mervyn’s has about 42 percent of its retailing space, a successful turnaround of this division is uncertain, the agency said.
“While Dayton’s operating cash flows remain generally strong and predictable, weaker operating profits at Mervyn’s and the department store division, coupled with about $1.4 billion of capital expenditures in 1995 and annual dividends of $150 million have resulted in credit protection measures that are relatively thin for our rating level,” Duff & Phelps said.

OFF-PRICE SLIDE: Off-price chain 50-Off Stores Inc. widened its third-quarter loss to $1.1 from a loss of $636,112 a year ago.
In the quarter ended Nov. 3, sales fell 17.7 percent to $37.6 million from $45.7 million, and same-store sales sank 12.8 percent. Excluding the retailer’s 13 border stores, which have been hurt by economic troubles in Mexico following last December’s peso devaluation, same-stores declined sales 7.7 percent.
In the nine months, 50-Off lost $2.4 million against a loss of $1.8 million a year earlier. Sales decreased 8.3 percent to $124.9 million from $136.2 million. Same-store sales were down 6.2 percent.
Based in San Antonio, Tex., 50-Off operates 102 units in 11 Southern and Southwestern states.

SEEING RED: After acquiring 368-unit Wet Seal Inc., Canadian specialty retailer Suzy Shier Ltd. reported a loss of $488,148 ($659,000 Canadian) for the third quarter. The chain earned $1.4 million Canadian, or 12 cents a share Canadian, a year ago.
Wet Seal Inc. operates Wet Seal and Contempo Casuals stores in the U.S.
Sales for the three months ended Oct. 28 more than doubled to $140.7 million, including $86.8 million from Wet Seal. Suzy Shier said consumer demand for women’s apparel has been weak all year, and it has maintained market share at the expense of gross margins.
The company operates 267 Suzy Shier and LA Express stores in Canada. It also operates 132 Canadian and 22 UK-based La Senza lingerie and sleepwear stores.

JOYCE’S SHARE PLAN: Joyce Boutiques Holding Ltd. has sold 52 million new shares, representing 20 percent of the outstanding shares, at 22 cents a share ($1.76 Hong Kong.)
The proceeds will finance expansion, including lifestyle stores in Bangkok and Hong Kong; single-label boutiques in Hong Kong, Macau, Bangkok, Taipei and Seoul, and Joyce Restaurants in Hong Kong.
Joyce reported profits for the half ended Sept. 30 rose 10.5 percent to $4.5 million (HK$34.7 million.) Sales jumped 17 percent to $64.4 million (HK$496 million).

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