NEW YORK — Despite a $2.2 million pretax charge related to the pending closure of the Frederick Atkins buying office, Peebles Inc.’s earnings rose 16 percent in its year ended Jan. 29, to $7 million from $6.1 million.
Sales for the Southern department store chain, based in South Hill, Va., climbed 13.4 percent to $300.8 million from $265.2 million, with same-store sales ahead 1.2 percent, according to the firm’s 10-K.
The Atkins charge represented Peebles’s entire investment in the co-operative buying service, which in early April said it would cease operations around Sept. 30 because it lost its core client base as department stores consolidated.
Atkins merchandise amounted to 7 percent of sales at Peebles last year. Although in 1996, Atkins accounted for 15 percent of sales, less has been incorporated recently because of the financial problems at Atkins.
Peebles said it is currently working on obtaining access to, or purchasing, certain private label trademarks of Atkins. Atkins will assist in buying imports for Peebles through the third quarter, but Peebles said it has plans in place so any disruption will not have a material impact on its financial condition or operations. It noted that it buys from over 1,200 vendors.
Overall, Peebles said it benefited from overall strength of consumer demand for apparel, which accounts for 85 percent of its sales. Also contributing to the better earnings was an emphasis on a less promotional, value-priced merchandising strategy.
Peebles, with stores averaging 30,000 square feet, operates in smaller markets than traditional department stores. It had 121 units in operation at yearend. It plans to open five new stores in 2000 and six in 2001.