Dress Barn Now Sells to Men With Maurices Purchase
Suffern, N.Y., Dress Barn, Inc. is spending $320 million to acquire Maurices, an apparel and accessories retailer that sells to both women and men. Dress Barn, which sells only to women, says it will finance the transaction through a combination of cash on hand and new credit facilities. Based in Duluth, Minn., Maurices operates 464 stores in 38 states, chiefly in strip centers and malls. Dress Barn, meanwhile, has 792 stores in 45 states.
For the year ended Feb. 28, 2004, annual sales amounted to $342 million. Annual sales of the merged company are expected to exceed $1.1 billion. Maurices will operate as a separate division of Dress Barn and will continue to be led by Lisa Rhodes, chief merchandising officer, and CFO George Goldfarb. Maurices is expected to open 20 new stores during the remainder of the year, and roughly 30 to 40 stores annually over the next several years.
In related news, Dress Barn reported earnings of $6.6 million in the first quarter, a 2.9% decrease when compared with earnings of $6.8 million. Same-store sales rose 1% while overall revenues increased 2% to $197.1 million.
Wal-Mart Breaks Q3 Records
Bentonville, Ark., Wal-Mart Stores posted record third quarter sales and earnings for the quarter ended Oct. 31. Net income rose to $2.29 billion, up from $2.03 billion in the same quarter last year. Net sales were $68.5 billion, an increase of 9.7% over the third quarter of fiscal 2004. Income from continuing operations for the quarter was $2.3 billion, an increase of 12.7% from $2.0 billion in the third quarter of fiscal 2004. Total U.S. comparable sales for the quarter increased 1.7 percent, which is represented by a 1.3 percent comp increase for Wal-Mart Stores and a 4.0 percent comp increase for Sam’s Club.
Lee Scott, President and CEO said, “I am pleased to report another record quarter of sales and earnings. The economy continues to improve and we are well positioned for the holidays.”
Luxury Shopping Index Declines
Stevens, Pa., Luxury consumers’ confidence in the economy took a hit in the third quarter. After rising to 102.7 in the second quarter, the Luxury Consumption Index declined to 96.0, down 6.7 points, according to Unity Marketing’s latest tracking study of the luxury market.
The Luxury Consumption Index measures the luxury consumers’ feelings and attitudes about their financial well-being. The majority of luxury consumers (53%) felt their financial position was the same and no better than during the previous three months. Further, nearly 40% said the country as a whole was less well off in the third quarter.
“The market for luxury goods and services is driven by consumers’ feelings, certainly not needs,” says Pam Danziger, president of Unity Marketing and author of the new book Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. “Luxury consumers (average income $136.5k) with their surfeit of material wealth have no pressing need to go shopping when things don’t look promising. Luxury consumers are in a unique position to wait it out when times are tough and that is just what they did in the third quarter.”