FINANCE

GNC has strong Q4; will enter Russia

BY Dan Berthiaume

Pittsburgh — GNC Holdings Inc. reported positive financial performance during the fourth quarter and fiscal year 2013. For the quarter, net income slightly rose to $47.7 million from $47.4 million in the same period the prior year.

In addition, the chain reported consolidated revenue of $613.7 million for the quarter, an increase of 8.6% from $565 million from the year-ago period. Same-store sales increased 5% in domestic corporate stores and 3.3% in domestic franchise stores.

During the fiscal year, net income grew 8% to $260 million from $240.2 million the previous year. Consolidated revenue totaled $2.63 billion, up 8.2% from last year.

GNC has also reached a master franchise agreement with Rusvit for its market entry into Russia. Rusvit, headquartered in Moscow, is led by founder and chairman Alex Kovaler, who has helped build other consumer businesses in Russia, including Wendy’s, Nathan’s and RC Cola. Beginning in 2014, a GNC presence will be established initially in Moscow with stores, kiosks and store-within-a-store locations with premier retailers.

For the full year 2013, the company opened 149 net new domestic company-owned stores, 192 net new international franchise locations, 63 net new domestic franchise locations, 34 net new Rite Aid franchise store-within-a-store locations, five net new company-owned stores in Canada, and two new company-owned stores in China. GNC now operates 8,593 stores worldwide.

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FINANCE

Build-A-Bear swings to Q4 profit; narrows full-year loss

BY Dan Berthiaume

St. Louis — Build-A-Bear Workshop swing to a profit in the fourth quarter as net income rose to $5.4 million, compared to a loss of $36.5 million a year earlier.

Consolidated net retail sales for the quarter totaled $106.3 million, while operating 28 fewer stores at quarter’s end compared to $116.1 million in the year ago period.

Same-store sales decreased 2.2%, including a 2.8% decline in North America and a 0.1% decline in Europe.

For the full fiscal year, the chain reported a net loss was $2.1 million, an improvement from a net loss of $49.3 million in fiscal 2012. Net retail sales were $373.2 million, compared to $374.6 million in fiscal 2012. Consolidated same-store store sales increased 5.1% and included a 5.7% increase in North America and a 2.9% increase in Europe.

“In a highly promotional retail environment and with fewer stores, we increased gross margin and operating profit leading to a $4.3 million improvement in adjusted net income as compared to the fourth quarter last year ,” said Sharon Price John, CEO of Build-A-Bear Workshop. “We continued to make progress on our turnaround plans to drive our company to sustainable long term profitability.”

Looking ahead, Build-A-Bear plans to close 10-15 North American stores and shift some sales to other store in existing markets while selectively upgrading stores with key features from its new interactive format. The company expects to strategically open new stores on an opportunistic basis.

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OPERATIONS

Starbucks expands in Southeast Asia

BY Dan Berthiaume

Seattle — Starbucks Coffee Company is opening its first store in Brunei, the company’s 64th global market, and its 100th store in Singapore, which will give people with autism the opportunity for employment and skills.

“The Starbucks China and Asia Pacific region continues to be at the forefront of the company’s global expansion initiatives, and we continue to be humbled by the warm reception we receive from our customers,” said John Culver, group president, Starbucks Coffee China and Asia Pacific, Channel Development and Emerging Brands.

Starbucks will open its first store in Brunei on Feb. 16 at Mabohai Mall. The first Brunei Starbucks store has been designed to reflect Starbucks 43-year coffee heritage, while embracing the country’s distinctive local traditions and culture. Key features in this magnificent space include a “slow bar” which serves coffee, using the traditional Pour-Over brewing method, and a floor-to-ceiling glass window. In addition, this store features locally-sourced furnishings, including traditional baskets from the local markets which have been repurposed as decorative artwork within the store.

In addition, Starbucks’ nearly decade-long alliance with the Autism Resource Center (Singapore) provides an opportunity for members of the community to receive the necessary job training and support that enable people with autism to join the workforce and lead more independent lifestyles. At the time of the 100th store opening in Singapore, six partners with autism have been hired to work at the store, with the goal to expand the relationship with the Autism Resource Center in the coming years.

The company is on track to expand its footprint by adding approximately 750 stores across Starbucks China and Asia Pacific region in 2014. Southeast Asia will play a significant role in this growth, driven both within existing markets, including Singapore, Vietnam, Malaysia, Indonesia, Thailand and the Philippines, as well as new markets such as Brunei.

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