FINANCE

Build-A-Bear narrows Q2 loss

BY Dan Berthiaume

St. Louis — Build-A-Bear Workshop narrowed its second-quarter loss to $6.2 million from $7.5 million in the year-ago period, boosted by improved sales and store productivity.

Total revenues were $81.9 million , up 1.9% from the $80.4 million reported in the second quarter of 2012. Same-store sales rose 7.3%, including an 8.6% increase in North America and 1.7% increase in Europe. E-commerce sales rose 5.2%.

“We continued to show progress in the second quarter with increased comparable-store sales, growth in total sales on a lower store count and expansion in gross profit margin, as compared to last year,” said Sharon Price John, CEO of Build-A-Bear. “Our brand marketing, product and real estate initiatives led to our third consecutive quarter of positive comparable-store sales in North America. This, along with a reduction in promotional activity, resulted in improved operating performance for the quarter and first half of the year."

During the quarter, the company closed 10 stores to end the period with 323 company-owned store, with 263 in North America and 60 in Europe. Build-A-Bear also remodeled four stores in its new design format. The company’s international franchisees ended the quarter with 90 stores in 14 countries.

Looking ahead, Build-A-Bear continues to expect to close an additional 20 to 35 stores in fiscal 2013 and 2014, along with limited, opportunistic store openings, to reach its optimal store count of 225 to 250 stores in North America. These select store closures are expected to transfer approximately 20% of sales to other stores in the same markets, which is consistent with the average transfer rate of the stores closed since 2012.

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FINANCE

Class-action suit accuses Kohl’s of securities violations

BY Dan Berthiaume

Menomonee Falls, Wis. – Bernstein Liebhard has filed a securities class-action complaint in the U.S. District Court for the Southern District of New York on behalf of all those who purchased shares of Kohl’s Corp. between Feb. 26, 2009. and Sept. 13, 2011. The complaint alleges that Kohl’s and some of its executives and directors violated the Securities Exchange Act of 1934 during that time period by materially understating the company’s reported debt, overstating reported equity, materially understating leverage ratios and not complying with other accounting and financial reporting requirements.

In August 2011, Kohl’s reported errors in accounting for its leases, which eventually resulted in a loss of stock value the following month. Anyone who invested in Kohl’s shares during the class period and either lost money on the transaction or still holds the stock may be eligible to participate in the suit. Kohl’s has not released a statement in response to the complaint.

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OPERATIONS

Home Depot recalls 107K fan heaters

BY Dan Berthiaume

Atlanta – The Home Depot is recalling about 107,000 Chinese-made fan heaters because the fan’s plastic housing can melt, deform and catch fire during use, according to the Consumer Product Safety Commission (CPSC). The Soleil portable fan heaters, marked with model number LH-707, cost about $15 each, and Home Depot will issue a full refund for the purchase price.

The heaters were sold between September 2012 and May 2013 for about $15 each. The CPSC says there have been 464 reports of fans melting, but no injury or property damage has been reported.

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