FINANCE

Q3 net income falls at Destination Maternity; 21-23 new stores planned

BY Dan Berthiaume

Philadelphia – Net income at Destination Maternity Corp. fell 36% to $5.5 million in the third quarter of fiscal 2014 from $8.6 million a year earlier. Expenses related to the planned relocation of Destination Maternity’s corporate headquarters and distribution facilities, as well as costs related to its proposed and withdrawn merger with Mothercare plc, drove the reduction in net income.

Destination Maternity plans to open 21 to 23 new stores during the year, including seven to eight new multi-brand Destination Maternity nameplate stores, and close approximately 51 to 54 stores, with seven to eight of these planned store closings related to openings of new Destination Maternity nameplate stores.

Net sales for the third quarter of fiscal 2014 decreased 5.5% to $134 million from $141.9 million for the third quarter of fiscal 2013. The decrease in sales for the third quarter of fiscal 2014 compared to fiscal 2013 resulted primarily from a 5.3% decrease in same-store sales and decreased sales related to the company’s continued efforts to close underperforming stores.

Destination Maternity plans to relocate its corporate headquarters in late 2014 and its distribution operations in early/mid 2015 from Philadelphia, to Florence, New Jersey. The retailer expects to close on the sale of its current headquarters/distribution facility by the end of fiscal 2014, and expects to realize a gain from the sale of this facility. Destination Maternity will also incur some charges to earnings in fiscal 2014 and 2015 related to the closure of existing facilities and the preparation for occupancy of new facilities.

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FINANCE

E-commerce costs cut Big 5 net income; 12 net new stores planned

BY Dan Berthiaume

El Segundo, Calif. – Expenses associated with the development of its e-commerce platform helped drive net income at Big 5 Sporting Goods Corp. down 59% to $2.5 million in the second quarter of fiscal 2014, from $6.1 million in the same quarter a year earlier.

For the fiscal 2014 full year, Big 5 currently anticipates opening approximately 12 net new stores

For the fiscal 2014 second quarter, net sales were $231.2 million, down 4% from net sales of $239.9 million for the second quarter of fiscal 2013. Same-store sales declined 4.9% for the second quarter of fiscal 2014.

Sales results for the second quarter of fiscal 2014 reflect a continued reduction in demand for firearms, ammunition and related products, as well as general softness in the overall consumer environment. Second quarter sales also reflect the small unfavorable impact of the calendar shift of the Easter holiday, during which the company’s stores were closed, out of the first quarter and into second quarter 2014.

Big 5 anticipates same-store sales growth ranging from slightly negative to slightly positive for the third quarter.

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Ulta Beauty implements Oracle Endeca search technology

BY Dan Berthiaume

Chicago – Ulta Beauty, in partnership with Thanx Media has implemented Oracle Endeca Site Search and Experience Manager solutions. Oracle Endeca has replaced a third-party search solution, now tightly integrating the browse and search navigation.

The previous lack of integration with the third-party search solution caused discrepancies in product data (such as pricing and inventory levels between search and browse) resulting in product listing pages that didn’t always match and a process that lacked the flexibility required by the e-commerce business team.

Oracle Endeca Site Search was phased in just prior to the 2013 holiday shopping season. Positive fourth quarter results and desire for more business control emphasized the need for a spring-time implementation of Experience Manager.

“The decision to replace the existing search was in response to a need to provide a seamless customer experience throughout the site and to put the control into the hands of the business team,” said Michelle Pacynski, VP IT, customer facing systems, Ulta Beauty.

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