HANOVER’S NET DIVES, GUMP’S ON THE BLOCK
Byline: Vicki M. Young / With contributions from David Moin
NEW YORK — Hanover Direct Inc., which widened its losses in 2000, has retained Newmark Retail Finance Advisors to find buyers for its upscale Gump’s business and other assets.
Without divulging fourth-quarter results, Hanover reported Tuesday a net loss of $80.8 million, or 40 cents a share, for the year ended Dec. 30, compared with a $16.3 million, or 8 cents, loss for 1999. The company said the $64.5 million increase in losses was due to higher distribution and system development costs related to the expansion of the company’s business-to-business e-commerce operation, fourth-quarter special charges in connection with the realignment changes announced in January and the impact of write-down of inventory in connection with discontinued catalog brands.
Revenue for the year was up 9.7 percent, to $603 million in 2000 from $549.9 in 1999. The company said revenues from its core catalog brands — The Company Store, Domestications, Improvements and Silhouettes — were up 10.6 percent for the year.
Brian Harriss, senior vice president and chief financial officer, disclosed in a phone call that the company’s fourth-quarter loss before taxes was $38.8 million versus a $3.7 million loss before taxes in the comparable 1999 quarter. Revenue for the period was $189.1 million, compared with $169.2 million in the year-ago quarter.
The company said that it recently hired Newmark Retail Financial Advisors to find buyers for its Gump’s By Mail and Gump’s San Francisco business; its Brawn of California business, which includes the International Male and Undergear brands, and a warehouse and fulfillment facility in Hanover, Pa.
Gump’s, a 140-year-old retail institution in San Francisco, is known for its high-end tabletop, gifts, garden products and fine jewelry. It also operates a national catalog that’s more commercial than the store, which is located at 135 Post Street. Reportedly, Gump’s retail and catalog combined post around $70 million in annual sales.
Newmark recently has handled other high-profile transactions including the sale of Adrienne Vittadini to Casual Corner and Joan & David to Maxwell Shoe, and is working to sell the intellectual properties of Wards, including private brand names such as Northwest Blues.
The catalog firm, which has a history of operating losses, cautioned that factors such as the current general deterioration in economic conditions in the U.S. could impact fiscal 2001 results. In addition to lower consumer confidence and the withdrawal or reduction of credit among key suppliers, Hanover cited its difficulties obtaining and distributing merchandise in a timely fashion as among the factors threatening 2001 sales and earnings.