KELLY RESIGNS FROM MERCHANDISING POST AT GOODY’S
Byline: Arnold J. Karr
NEW YORK — In what could be the first of a series of management moves designed to energize the lackluster performance of Goody’s Family Clothing, Tom Kelly has resigned as executive vice president and general merchandise manager of the Knoxville, Tenn.-based family apparel specialty store.
The change at Goody’s follows a nearly unbroken string of bad news dating back to the end of last year. Last week, the company said it would fall short of its previous first-quarter earnings estimate of 14 cents a share because of increased promotional activity and disappointing sales.
Last year’s first quarter yielded earnings per share of 22 cents, and Wall Street’s consensus estimate for the quarter just concluded is 8 cents per share.
“Merchandise sales related to seasonal warm-weather business such as shorts, T-shirts and swimwear were weak, while merchandise sales related to the Easter holiday business such as dresses were strong,” Bob Goodfriend, chairman and chief executive, commented in a statement on the lowering of first-quarter earnings expectations last week.
He added that efforts to increase unit sales and reduce inventory led to higher promotional activities during the last two weeks of April. During the fourth quarter of 1999, profits plunged nearly 90 percent, to $858,000.
The company said first-quarter sales hit $278.3 million, an 11 percent increase, but same-store sales during the period were off 1.4 percent. In a similar vein, April’s sales increased 14.6 percent to $96.7 million, with comps up 1.5 percent.
Goody’s merchandising division, which had reported to Kelly, will report directly to Goodfriend until a successor is appointed. Kelly had reported directly to Goodfriend.
Goody’s opened four new units last week, pushing its number for 2000 to 12 and its total store count to 297.
Goodfriend said after the release of fourth-quarter results in March that significant changes in operations, merchandising and marketing are planned for 2000. Special sizes, petites, intimate apparel and children’s wear, sources of healthy margins, are being expanded, and the OCI young men’s label is being moved into juniors and possibly into shoes and accessories later.
Fine jewelry, candles, aromatherapy, bath and body and maternity wear are being introduced, while men’s blazers, luggage, comforters and lamps will be discontinued; the Montana Blues line of denim will be withdrawn.
The company also plans to stabilize pricing by limiting markdowns to once a month and reduce store clutter by increasing its representation of goods on hangers and lowering the percentage of folded goods.
Kelly, who couldn’t be reached for comment, was gmm of Ira A. Watson Co. for five years before joining Goody’s as executive vice president and gmm in 1990.
He served in that capacity for three years before leaving the company to join SoloServe as senior vice president and gmm. He rejoined Goody’s with his former title in 1995.
Goody’s shares were up 3/8 Monday to close at 5 5/8. Its range for the year has been as high as 12 and as low as 4 9/16.