News

Comp-store sales slip at the Bon-Ton Stores

BY CSA STAFF

YORK, Pa. — Bon-Ton Stores pointed to inclement weather in its markets and higher gas prices in the Northeast and Midwest for overall sales weaknesses which translated into a same-store sales decrease of 6.4% for the second quarter ended Aug. 3.

The unfavorable shift in consumer spending patterns affected the company’s total sales for the quarter, which decreased 6.3% to $557 million, compared with $595 million for the prior-year period.

Despite disappointing sales results, the company’s gross margin rate increased 100 basis points to 37%, compared with 36% for the prior-year quarter. In addition, the company’s net loss was $37.3 million, or $1.95 per diluted share — an improvement over the prior-year quarter’s net loss of $45 million, or $2.43 per diluted share.

“We were disappointed in our second quarter sales performance, but we were pleased we were able to deliver on several of our goals, including a 100 basis point increase in the gross margin rate and reduced expenses, which led to 23% growth in Adjusted EBITDA,” said Brendan Hoffman, president and CEO. “Looking ahead, we remain focused on the continued execution of our key merchandising, marketing and e-commerce strategies, including the localization of our merchandise assortments and marketing programs to drive top-line growth, while maintaining disciplined inventory management and careful cost controls.”

The Bon-Ton Stores, Inc., with corporate headquarters in York, Pa., and Milwaukee, Wis., operates 270 department stores, which include 10 furniture galleries, in 24 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.

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News

Unilever executive named as Ahold HR chief

BY CSA STAFF

ZAANDAM, Netherlands — Dutch supermarket-operating company Ahold has appointed Abbe Luersman as the company’s chief human resources officer.

Ahold said that Luersman, who will report to CEO Dick Boer, will assume the new position on Nov. 1. Ahold’s U.S. division operates the Stop & Shop, Giant Food Stores of Carlisle, Pa., and Giant Food of Landover, Md., supermarket banners, as well as the Peapod online grocery service.

"We are delighted to have such an international, business-minded HR expert joining our company," Boer said. "We can only reshape retail if we have the right talent in our company to execute this great ambition. Abbe’s background in HR programs supporting business transformation in both the United States and Europe is not only impressive, but also highly valuable for Ahold."

A U.S. national, Luersman started her career at Whirlpool Corp. in 1991 and, 16 years later, began working for Unilever, most recently as SVP human resources for the company’s Europe division.

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FINANCE

Abercrombie & Fitch Q2 results disappoint; outlook below estimates

BY Marianne Wilson

New Albany, Ohio — Abercrombie & Fitch Co. earned $11.4 million for the second quarter, down from $17.1 million in the year-ago period, amid a 10% drop in same-store sales. The retailer, whose results missed analysts’ estimates, also gave a third-quarter earnings forecast well below Wall Street expectations.

Abercrombie & Fitch and many other teen retailers have struggled of late, with their sales impacted not only by financially constrained consumers but also by the inherent fickle nature of their customer base.

“One generation of customers has moved on and the next generation doesn’t see Abercrombie as cool,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business, in a Reuters report.

Revenue for the period ended Aug. 3 edged down 1% to $945.7 million. In the United States, sales fell 8% including the direct-to-consumer business. Wall Street estimated revenue of $996.7 million.

Same-store sales fell 10%. Same-stores fell 11% in the United States, and 7% overseas. By division, Hollister Co. had the toughest quarter, with a 13% sales drop. The chain’s namesake brand reported a 6% decrease, while same-store sales for Abercrombie kids fell 3%.

International sales, including direct-to-consumer, rose 15%. Direct-to-consumer sales for the whole company jumped 21%.

"The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported. In that context we are planning sales, inventory and expenses conservatively for the remainder of the year," said Abercrombie CEO Mike Jeffries in the release. "Despite the challenging environment, we are very pleased by strong growth in our direct-to-consumer business and continued strong growth in China. We have also made excellent progress on our profit improvement initiative during the quarter, and we now expect savings from this initiative to exceed $100 million annually.”

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