Fractured Prune Doughnuts plans 50 new stores
Ocean City, Md. — Fractured Prune Doughnuts has announced a national expansion projecting 50 new store agreements in the next six months. The next Fractured Prune will open in St. George, Utah, on Sept. 24.
The brightly colored doughnut shops promote always hot doughnuts, available all ways and offers 15 glazes and 15 toppings.
Target receives LEED certification for 44 more Canadian stores
Mississauga, Ontario — Target announced that an additional 44 store locations in Canada have been awarded LEED (Leadership in Energy & Environmental Design) certification. This means that all 68 newly launched Target locations have been awarded LEED certification, a first for a major retailer in Canada.
Target is pursuing LEED certification for all 124 stores scheduled to open in Canada this year through the LEED Volume Program, which streamlines the certification process for buildings in both Canada and the U.S.
In order to obtain certification, remaining Target stores will undergo various rounds of audits throughout 2013, which must meet stringent criteria across five LEED categories including: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.
Target plans to open 124 stores across Canada throughout 2013. Currently the retailer has 68 stores open in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.
Lower-than-expected retail sales affect Men’s Wearhouse second quarter
The Men’s Wearhouse experienced a decline in customer traffic and a subsequent drop in retail clothing sales during the second quarter ended Aug. 3, and has lowered its guidance as a result.
"Retail clothing sales during the second quarter were below our internal plan as we experienced a decline in customer traffic compared to last year’s second quarter. We believe this is primarily due to macro issues affecting the apparel retailing space," explained Doug Ewert, president and CEO. "Despite the difficult economic climate, we remain committed to our operating and capital allocation plans that were laid out earlier this year. Throughout the past six months we have improved financial flexibility, purchased the American designer brand Joseph Abboud and its U.S. manufacturing operations, and repurchased approximately $152 million of our shares; and we continue to evaluate strategic alternatives for our K&G operations.
In July, the company signed a definitive agreement to acquire JA Holding, Inc., the parent company of the American clothing brand, Joseph Abboud, for approximately $97.5 million in cash consideration, subject to certain adjustments. The transaction closed on Aug. 6 and was funded with the $100 million term loan available under the company’s credit facility.
Total net sales for the quarter decreased 2.3% to $647.3 million from $662.3 million for the same prior year period. Retail segment sales for the quarter decreased by 1.9% or $11.2 million and corporate apparel sales decreased by 6.6% or $3.8 million as compared to the prior year quarter.
Net sales at core flagship brand Men’s Wearhouse stores, which represented 66% of total second quarter sales were down 0.7% from last year’s second quarter sales. Comparable store sales increased 0.7%, but were below internal expectations. The higher margin tuxedo rental revenues comparable store sales increased 0.4% in the quarter.
Moores, the Canadian retail brand, represented 12% of total second quarter sales, had a comparable store sales decrease of 4.9% due mainly to decreased average transactions per store and units sold per transaction that more than offset increased average unit retails. K&G represented 13% of the company’s total second quarter sales and had a comparable store sales decrease of 3%.
The corporate apparel segment, which represented 8% of total second quarter sales, had a sales decrease of 6.6% due mainly to an expected lower level of customer-directed new uniform rollouts in the U.K.
The consolidated total gross margin was down 3.6% with the total gross margin rate decreasing 65 basis points primarily because of an Easter-related shift in tuxedo revenues and the deleveraging of occupancy costs. The retail segment total gross margin was down 3.4% and the corporate apparel gross margin decreased 6.1%.
The company remains confident about its merchandising and operating strategies, but citing concerns about "the current macro trends in the apparel industry," it is lowering its comp store growth assumptions by approximately 2% at Men’s Wearhouse and Moores, resulting in a full year expectation of adjusted earnings per share of $2.40 to $2.50.