OPERATIONS

Report: Data breach hits Tesco

BY Dan Berthiaume

Cheshunt, U.K. — Major British supermarket chain Tesco plc has reportedly been the victim of a data breach. According to CNBC, hackers have gained access to the personal data of more than 2,000 Tesco customers and posted it online.

Tesco has reportedly deactivated some customers’ online accounts after discovering their login information was posted on a text-sharing website. Hackers reportedly took online login data stolen in other breaches and discovered that many Tesco customers used the same information for their Tesco accounts as they did for other accounts.

In an email, a Tesco spokesperson told CNBC that the company has notified customers who are affected and will issue replacement vouchers.

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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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