NEW YORK — Citing cost-cutting and a stronger focus on career customers, Gantos Inc. reported a vastly improved operating profit in the fourth quarter. The 114-unit specialty retailer said the operating profit in the quarter ended Jan. 28 grew to $3.9 million from $792,000 last year. As reported, the chain received bankruptcy court approval this month on its plan of reorganization, which is expected to become effective in several weeks. Gantos also received a commitment for $40 million in financing from a bank group led by National Westminster Bank. Interest expenses, reorganization costs and an accounting change put net income at $4.4 million, or $1.67 per share. Last year, extraordinary items created a net loss of $212,000. Per share earnings reflect two reverse stock splits included in the plan of reorganization but not the five million additional shares to be issued when the plan becomes effective.
Sales in the period slipped 2.8 percent to $58.2 million from $59.8 million.
For the year, Gantos, based in Grand Rapids, Mich., reported an operating profit of $2.8 million compared with a $46.1 million operating loss in 1993. Extraordinary items put net profit at $2.6 million, or 97 cents. Last year, one-time expenses and credits put the net loss at $43.1 million.
Revenues for the year were off 14 percent to $197.3 million from $229.4 million. L. Douglas Gantos, chief executive officer, said in a statement that the fourth quarter signaled a turnaround for the retailer.
Gantos stock closed Wednesday up 1/8 to 1 7/8 in over-the-counter trading.
— Fairchild News Service