Byline: Evan Clark

NEW YORK — Taking wider first-quarter losses in stride, Burlington Coat Factory Warehouse Corp. said that TV advertising, competitively priced outerwear and new store layouts would help boost revenues in coming quarters.
Net losses for the first quarter widened 43 percent to $14.4 million, or 32 cents a share, against $10 million, or 22 cents, a year ago. The most recent quarter included a $815,000 aftertax extraordinary loss from early extinguishment of debt while the year-ago period included a $1.4 million aftertax loss due to an accounting change.
Revenues for the period ended Sept. 2 rose 10.9 percent to $421.2 million against $379.7 million a year ago. Comparable-store sales increased 1.4 percent for the quarter.
Bernard Brodsky, vice president and treasurer of the Burlington, N.J.-based company, told WWD, “We pride ourselves on controlling our expenses very well, but with same-store sales up 1.4 percent, it’s difficult.”
Brodsky noted that the widening of losses was due, in part, to industrywide apparel softness, inclement weather and high fuel prices. The company, which generated about 18 percent of its sales in coats during the last fiscal year, had scaled back on spring coats and raincoats and wasn’t able to take full advantage of the cooler season.
The company reduced its selection of raincoats because of general softness in the category over the past few years.
As was the case with other apparel retailers higher markdowns also took their toll in the quarter.
Selling, general and administrative expenses for the period rose to $158.5 million or 38.1 percent of sales against $139.9 million or 37.3 percent of sales a year ago. The rise was primarily caused by increases in advertising and payroll. Advertising costs associated with the Labor Day holiday, included in the first quarter this year due to a calendar change, cost the company about 2 cents a share during the period. Payroll, which increased 3 percent on a same-store basis during the period, is expected to be flat for the rest of the year.
The company told analysts on a conference call Thursday that, while it may sometimes be difficult to get assistance in its stores on busy Saturdays, it had a sufficient sales force that was in line with those of its competitors.
The company is also leveraging its national presence over most of its regional competitors by focusing its advertising dollars on prime-time television. Its TV campaign consists of image rather than promotional ads. “The marketing on TV has been helping to drive new people into our stores,” said Brodsky.

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