Byline: Thomas J. Ryan

NEW YORK — Aided by expansion initiatives, a surge in youthful fashions and greater marketing support, three specialty chains — Pacific Sunwear, Wilsons the Leather Experts and Chico’s FAS — racked up sterling campaigns this past holiday season.

Pacific Sunwear
A successful launch of its e-commerce business and further expansion of its d.e.m.o. operation highlighted a record quarter for Pacific Sunwear, as the Anaheim, Calif.-based specialty retailer saw net earnings soar 56 percent to $11.7 million, or 36 cents per diluted share, on a 38 percent sales increase, to $130.9 million. The quarterly performance, helped by 9.6 percent growth in same-store sales, topped Wall Street’s estimates by 12 cents.
Net income for the year reached $35.3 million, or $1.10 per diluted share, 50 percent ahead of the prior year and 2 cents ahead of consensus estimates. Sales for the year were $436.8 million, an increase of 50 percent.
“Our full-year pre-tax income improved to 13.2 percent of sales,” said Greg Weaver, chairman and chief executive, in a statement. “Our balance sheet remains strong, with $33 million in cash at the end of the year and no debt.”
The company currently operates 389 PacSun stores, 28 PacSun outlets and 40 Demo units for a total of 457 stores in 47 states. The company plans to open about 125 stores this year, including 40 in the newer Demo format.

Helped by a greater push toward youth and a stellar leather season, Wilsons the Leather Experts reported earnings climbed 28.7 percent in the fourth quarter to $51.8 million, or $4.47 a share, beating Wall Street’s consensus estimate by 11 cents.
Sales gained 17.8 percent to $317.3 million, with same-store sales ahead 12.1 percent. Sales were particularly strong for M. Julian and Maxima, its young men’s and women’s lines which together increased more than 50 percent on a comp basis.
Joel Waller, chairman and chief executive officer of the Minneapolis-based retail group, noted in a conference call that the firm shifted its merchandise and visual images to appeal to younger, more fashion-forward customers. “We believe that these Generation Y customers will be a powerful force for the next decade, and set the fashion trends for the broader population,” he said.
Waller indicated sales were strong across all categories, regions and formats. Same-store sales gained 11.9 percent at its mall-based stores, over 20 percent at its factory outlets and 19 percent at airport boutiques.
Gross margins grew to 45.3 percent from 42.6 percent as a result of higher selling prices and margins on fashion items and fewer clearance items.
Wilsons plans to add 45 stores this year, including 20 outlets and 25 at malls. It also plans to open its first flagship street store in Santa Monica, Calif. It ended last year with 444 mall-based stores, 55 outlets and 30 airport locations. Wilsons also operated 249 temporary units during the holiday season, up from 215 in 1998.

Chico’s FAS
Its first-ever national advertising campaign and a growing number of members in its passport customer loyalty program helped Chico’s FAS’s fourth-quarter earnings skyrocket 88.1 percent to $3.2 million, or 19 cents a share. Sales jumped 56.3 percent to $41.8 million, with same-store sales ahead 26.5 percent.
Marvin Gralnick, ceo of the Fort Myers, Fla.-based company, said the gains also stemmed from the opening of 41 new stores and renovations of 25 stores into a larger format.
In a conference call, officials said the passport program, which qualifies customers for 5 percent discounts once they’ve spent $500 or more, accounted for about half of sales during the quarter; the number of members having reached nearly 100,000.
Chico said its national advertising campaign, started in October, drew 12,000 requests for its catalog, with 3,100 from Martha Stewart Living alone. The ads will resume in March.
In the full year, earning gained 69.5 percent to $15.5 million, or 91 cents, as sales gained 45.1 percent to $152.5 million. Same-store sales gained 23.3 percent, with sales per square foot reaching $675.

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