CLUB MONACO LOSSES WIDEN IN 1ST PERIOD, CITE ASIAN ILLS
NEW YORK — Citing weakness in Southeast Asia, Club Monaco Inc. widened its loss in the first quarter to $736,000 from $345,000.
Sales at the Toronto-based specialty store chain slid 0.9 percent to $14.2 million from $14.4 million, with same-store sales off 5.5 percent. Dollar figures are U.S., translated from the Canadian dollar at current exchange.
Club Monaco said it is placing a greater emphasis on company-owned store expansion in North America after a significant dropoff in shipments to Asian franchisees due to financial turmoil in the region.
Revenue from merchandise shipments to franchises and related royalties fell by about 75 percent in the quarter, Monaco noted.
Last year, Asia accounted for 31.7 percent of sales compared with Canada, 54.5 percent, and the U.S., 13.8 percent. Joseph Mimran, president and chief executive, said he expects Asia to continue to remain sluggish, estimating the region will drop to 21 percent of sales this year. Mimran said performance in the U.S. remains strong, outpacing Canadian sales on a sales-per-square-foot basis.
Club Monaco reduced its worldwide store count in the quarter to 115 stores from 141 at the year’s start, largely due to store closings in Asia, particularly Korea.
Going forward, Club Monaco plans to increase the size of its stores, targeting an average of 6,000 square feet versus an average of 3,500 in 1997, noting that the larger stores perform better on a square-foot basis.
Club Monaco also plans to expand its cosmetics business in Macy’s in the United States and T. Eaton Co. in Canada, as well as its eyewear and housewares businesses. Club Monaco is also developing skin care and fragrance lines, with the first skin care product to be launched in January 1999.