QUARTER EARNINGS DECLINE 44.7% AT UNITED RETAIL, AVENUE OWNER
NEW YORK — Net earnings at United Retail, owner of the 505-unit, large-size, women’s apparel chain Avenue, dropped 44.7 percent to $2.9 million, or 21 cents a diluted share, from $5.3 million a year ago, or 38 cents, in the first quarter ended April 29.
Sales gained 2.8 percent to $99.4 million from $96.7 million. Same-store sales increased 3 percent, compared with a 5 percent jump in last year’s first quarter.
George R. Remeta, vice chairman and chief administrative officer, said in a statement that although sales and gross margin dollars were up from last year, “results were still short of ambitious plans to offset increased costs related to planned growth investment.”
For example, he said plans for the Rochelle Park, N.J.-based firm include the startup Shop@Home and increased occupancy costs. He also noted there was an increase in payroll costs.
Nonetheless, Raphael Benaroya, chairman, president and chief executive, said he was very pleased with the progress in the first quarter “in advancing our program for top line growth.” He said United plans to add between 5 and 10 percent in square footage this year. It ended 1999 with slightly more than 2 million square feet of retail space.
With Shop@Home, announced in March and intended to launch in the fall, United is looking to provide consumers with a shop-at-home strategy that includes a Web site and catalog that represent Avenue’s lifestyle image.
Benaroya said, “We are rapidly approaching a point at which the customer will expect to shop her chosen brand in all channels of distribution.” The shop-at-home strategy will extend the reach of the Avenue brand beyond the geographic scope of its store locations, he said.
He added that its objective is cost-effectively stimulating existing customers and acquiring new ones.
Xceed, a developer of e-business solutions, will develop the Avenue site and provide technological support. United also hired Wit SoundView, the online investment banking group of Wit Capital Group Inc., as its e-commerce strategy adviser.