WEAK SALES HURT PROFITS AT BARNEYS
NEW YORK — Barneys New York reported a loss for the third quarter, but also announced Thursday an amended bank credit facility, giving the retailer sufficient liquidity for the balance of fiscal 2001 and through 2002.
The new facility, led by Citibank, was expected, as reported by WWD over the past week. Barneys needs breathing room since it has been hurt by the decline in the luxury market and also has about $110 million in total debt to service. The facility establishes new covenant levels and interest rates with its lenders. Currently, Barneys, which operates seven stores and 12 outlets, has roughly $30 million available under its credit facility.
For the third quarter ended Nov. 3, the company had a loss of $8.4 million, or 61 cents a diluted share, reversing year-ago profits of $3.3 million, or 24 cents. EBITDA was $1 million versus $10.9 million a year ago.
Sales for the quarter declined 18.9 percent to $89.4 million from $110.2 million last year and 19.6 percent on a comparable basis.
For the nine months, Barneys lost $15.6 million, or $1.12 versus a loss of $1.2 million, or 9 cents, in the 2000 period. Sales dropped 7.7 percent to $268.6 million from $291.1 million and 9.2 percent on a comp basis. EBITDA was $6.8 million versus $21.1 million a year ago.
“Retailing in general and the luxury sector specifically have been negatively impacted by a slowing economy and the tragic events of Sept. 11,” Barneys chairman, president and chief executive Howard Socol said in a statement. “While sales fell significantly in September, we are encouraged by an improving sales trend in the ensuing months. Throughout the year, we have aggressively reduced expenses and believe we are well positioned today and for when the economic climate improves. We, like other luxury retailers, have taken more markdowns earlier and deeper than normal. These strategies have enabled us to bring our stock levels in line with our sales results.”