$20.3M OPERATING LOSS POSTED BY EDISON BROS. IN 3RD QUARTER
NEW YORK — Edison Bros. Stores Inc., which filed for Chapter 11 reorganization last month, reported a pretax operating loss of $20.3 million in the third quarter ended Oct. 28, amid weakening sales.
The company, which operates mall-based stores called 5-7-9 Shops, Jeans West, J. Riggins, Oak Tree and Zeidler & Zeidler, said a $66.6 million noncash pretax charge in the quarter put the net loss at $83.2 million.
Last year, the St. Louis-based company reported a profit of $600,000, or 3 cents a share.
Sales in the period fell 9.6 percent to $319.8 million from $353.6 million. Same-store sales fell 5.9 percent.
Part of the noncash charge in the quarter relates to a special markdown of inventory for the Zeidler and Riggins units. In a statement, Edison Bros. said it was “essential” that it quickly reduce the level of inventory at those stores, which are experiencing a decline in sales of tailored men’s clothing. However, the company said its 5-7-9 junior shops produced double-digit sales gains during the back-to-school period.
The company intends to close 473 stores by Jan. 31, mostly men’s wear units. It said the downsizing will increase cash flow in the fourth quarter ending Jan. 27, but will result in a pretax charge of up to $35 million in the quarter. Edison Bros. will also close its apparel distribution center in Rome, Ga., by Jan. 31, which may result in another fourth-quarter charge.
For the 1994 fourth quarter, Edison Bros. earned $17.2 million, or 78 cents a share, on revenues of $445.1 million. The year-ago fourth-quarter earnings included an after-tax benefit of $14 million for recovery of prior merchandise-related expenses.
Edison Bros. said it continued to see poor regular-price sales and pressure on margins in the third quarter and no overall improvement in the retail climate.
The company also said it plans to close about two dozen of its 35 stores in Mexico “in the near future.” — Fairchild News Service