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Destination Maternity Corporation, for the fourth quarter ended February 2, 2019 reported net loss of 6.4 million dollars or 46 cents per diluted share compared to 10.2 million dollars or 73 cents per diluted share, for the fourth quarter of fiscal 2017. Net loss for fiscal 2018 was 14.3 million dollars or 1.03 dollars per diluted share compared to 21.6 million dollars or 1.57 dollars per diluted share, for fiscal 2017.
“Several factors represented significant headwinds for our business in the fourth quarter,” said Marla Ryan, Chief Executive Officer of Destination Maternity in a statement, adding, “Challenging conversion results on our ecommerce sites and in store drove a 5.8 percent comparable sales decline and our promotional cadence and more aggressive approach to rightsizing inventory negatively impacted margins.”
Destination Maternity’s Q4 and fiscal 2018 financial highlights
Operating loss for the fourth quarter was 5.4 million dollars compared to 7.8 million dollars in the fourth quarter of fiscal 2017, while adjusted net loss was 4.4 million dollars or 31 cents per diluted share compared to 5 million dollars or 36 cents per diluted share in the same quarter of 2017. Adjusted EBITDA before other charges and effect of change in accounting principle decreased to 0.3 million dollars from 0.6 million dollars for the fourth quarter of fiscal 2017.
For the full year, operating loss was 9.6 million dollars compared to 16 million dollars for fiscal 2017, while adjusted net loss was 6.7 million dollars or 48 cents per diluted share compared to 10.2 million dollars or 74 cents per diluted share. Adjusted EBITDA before other charges and effect of change in accounting principle increased 23 percent to 16 million dollars for fiscal 2018 from 13 million dollars for fiscal 2017.
Net sales for the fourth quarter decreased 13.1 percent to 91.3 million dollars, negatively impacted by the net closure of 29 company-owned locations and 83 leased lease locations, a decrease in comparable sales, and the 53rd week in fiscal 2017. Comparable sales for the quarter decreased 5.8 percent from last year. Gross margin rate was 48.4 percent, a decrease of 200 basis points from the comparable prior year gross margin.
Net sales for fiscal 2018 decreased 5.5 percent to 383.8 million dollars, while comparable sales decreased 1.8 percent from 2017. Gross margin for fiscal 2018 was 51.6 percent, a decrease of 100 basis points from fiscal 2017.
Destination Maternity updates FY19 guidance
Updating its outlook for fiscal 2019, Destination Maternity said that the company now expects total sales to be in the range of 370 million dollars to 380 million dollars, comparable retail sales to be in the range of down 1 percent to up 1 percent, gross margin rate to be in the range of 51.5 percent to 52 percent, adjusted EBITDA before other charges to be in the range of 17 million dollars to 22 million dollars and adjusted diluted EPS to be in the range of loss of 12 cents to earnings of 8 cents.
Sales at Skechers USA Inc., grew 2.1 percent or 5.2 percent at constant currency to 1.276 billion dollars for the first quarter, which the company said was a result of a 9.3 percent increase in its international business, partially offset by a 6.3 percent decrease in the domestic business. Comparable same store sales in company-owned stores and e-commerce increased 0.7 percent, including 0.2 percent in the United States and 2.3 percent internationally—excluding 61 stores in India that recently transitioned from third-party to company-owned.
“The momentum we experienced in 2018 is continuing as we again achieved a new quarterly sales record in the first quarter of 2019,” said Robert Greenberg, CEO of Skechers in a statement, adding, “We are already seeing a positive impact in sales with the launch of our television campaigns for spring, and we believe our momentum will continue into the second quarter. Further, we’re looking forward to meeting with our domestic and international accounts and partners over the next two months, presenting our new styles and marketing.”
Review of Skechers’ first quarter results
On a constant currency basis, the Company’s international business increased 15 percent. By segments, the company’s international wholesale business increased 8.7 percent, its company-owned global retail business increased 6.7 percent, and the domestic wholesale business decreased 10.9 percent.
Gross margins for the quarter, the company added, were slightly lower as improved margins in its company-owned domestic retail business were offset by lower international margins from higher discounts and negative foreign exchange impacts. Earnings from operations increased to 165.9 million dollars or 11.5 percent. Net earnings were 108.8 million dollars and diluted earnings per share were 71 cents.
For the second quarter of 2019, the company believes it will achieve sales in the range of 1.200 billion dollars to 1.225 billion dollars, and diluted earnings per share of 30 cents to 35 cents.
New York - Avenue Stores has recently announced it has successfully refinanced its outstanding capital structure thanks to new credit provided by PNC Bank.
The women’s plus-size apparel and accessories retailer has been provided with a new revolving credit facility by PNC Bank which will retire Avenue’s existing term loan, fund ongoing liquidity and working capital needs and support the company’s strategic plans. Additionally, Versa Capital Management, owner of Avenue Stores, has also provided new capital.
“We are pleased to have completed this important recapitalization with PNC that positions Avenue to execute on our strategic plans across all of our sales channels,” said in a corporate statement Mark Walsh, CEO, Avenue.
The new capital structure will further strengthen the company by increasing its overall liquidity, reducing interest rates, and removing all debt amortization payments. The new structure is much more stable, flexible and better aligned with the strategic ability to continue investing and providing customers with the fashion and service they deserve, Avenue said.
“We look forward to continuing to empower plus-size women with an unparalleled range of quality fashion choices,” Walsh said. Agreeing, the company’s CFO added that “We are very pleased with the successful outcome of Avenue’s refinancing efforts.”
New York - Yucaipa Companies, Zac Posen’s longtime financial backers, is said to be considering divestment from House of Z, the designer’s company.
Yucaipa Company has owned a stake in House of Z for over 15 years. As reported by ‘WWD’, the president of Yucaipa, Frank Quintero, confirmed that he remains in support of the brand, although there are interesting opportunities to explore.
According to market sources quoted by ‘MF Fashion’, Posen would be trying to identify other potential strategic partners to help his company scale and accomplish further overseas expansion.
House of Z designs, markets and distributes prêt-à-porter, wedding dresses, and women's accessories with the labels Zac Posen, Zac Zac Posen and Truly Zac Posen.
London - The number of US shoppers visiting the UK rose by 30 percent in March compared to last year, with our neighbours across the pond now accounting for as much as 7 percent of the total tax free sales in the UK, new research shows.
The latest insight from Global Blue revealed that the UK now captures 24 percent of all the US tax-free shopping spend globally, with shoppers from the States spending an average of 930 pounds per tax free transaction. In 2018, over half (54 percent) of international shoppers landing in Europe were from the US.
Commenting on the findings, Derrick Hardman, managing director UK & Ireland at Global Blue, said: “This 30 percent boom in spend is due to several factors both in the UK and the US, combining to make the UK a particularly desirable location for Americans to shop. One factor driving the increased visitor numbers is the strength of the dollar to the weaker pound, allowing US shoppers to make their money go further on British soil when shopping tax free.”
Global Blue’s insight also revealed that Americans are increasingly visiting the UK for its retail offering, and that quintessentially British brands are particularly attractive for US visitors, with spend share being highest amongst UK brands, followed by Italian and French brands, respectively.
Hardman added: “The ‘Meghan effect’ has contributed to the growing desire for British brands amongst US visitors. The Duke and Duchess of Sussex provide the perfect combination of a British royal and US celebrity and as such, royal engagements amplify desirability to purchase luxury British brands worn by Meghan.
“This new data not only demonstrates the willingness of Americans to visit the UK and engage with the retail offering but also that US shoppers are becoming more comfortable with the concept of shopping tax-free.”
Photo credit: Pexels, rawpixel.com
Clarks has announced the appointment of former interim CEO Stella David as its new non-executive chair.
David will be replacing current chairman Tom O’Neill who will be stepping down on 3 May following the conclusion of the company’s AGM. O’Neill has served on the company’s board of directors for the past 15 years.
David was previously interim CEO of the British footwear retailer from June 2018 until March 2019, when she was succeeded by Giorgio Presca, and was appointed as an independent non-executive director of Clarks’ board in March 2012. Prior to that, David has been CEO of international spirits company William Grant & Sons and currently holds non-executive roles with HomeServe plc, Bacardi Ltd and Norwegian Cruise Line Holdings Ltd.
Commenting on her appointment in a statement, David said: “I would like to pay tribute to Tom O’Neill, who has been our chairman since 2013. He has seen the organisation through many challenges, most notably stepping in as Executive Chairman in 2015/16.
“On behalf of the board of directors I would like to express our thanks to Tom for his contribution to the Clarks business, with 15 years of dedicated service on our board. We greatly value his steady leadership over the years.”
Photo credit: Clarks
The headlines concerning Arcadia’s uncertain retail future, its recent store closures, a 500 million pound deficit and founder Sir Philip Green’s reputation in tatters has not impacted shoppers of its flagship brand. Or at least not yet.
Topshop appears to not yet be affected as consumer perception, according to YouGov data, remains largely positive. An article in London freesheet City AM pointed out Green’s reputation score in 2016 at the height of the BHS pension scandal fell just 1.2 points.
"Consideration scores (whether someone would consider purchasing from the brand in future) among current customers increased from +60.4 to +86.7, suggesting consumers registered the negative press but, far from boycotting the shop, it seems the publicity was making them think about buying.”
Current positive opinion of Topshop stands at 37 percent, whereas negative opinion scores 18 percent. As a retail brand, Topshop is the 42nd most popular fashion and clothing brand and the 8th most famous in the UK, described by fans as stylish, modern and trendy.
While the negative press has not yet dented sales, it does filter through to opinion and perhaps ultimately buying behaviour.
Photo credit: Eastgate Topshop, source: Wikimedia Commons license free
New York – Monsoon Accesorize, the parent company of the British accessories and fashion chains has brought in Deloitte advisers to look into options to speed up their financial turnaround.
Amongst other options considered, the retail group is said to be looking into a possible Company Voluntary Arrangement (CVA). This process has grown infamous as other struggling retailers like New Look followed it in the past, closing stores to face a tough retail environment. Traditionally considered as the last resort for companies bordering bankruptcy, market sources quoted by ‘The Guardian’ claim that landlords see this type of arrangements as an easy way for struggling companies to cut costs rather than taking more fundamental action to improve their businesses.
A spokesman for Monsoon Accessorize cited by UK press said: “The UK retail trading environment is tough and we are continuing to look at options to reduce our overall costs as we restructure the business in the UK and internationally.
“We have made no secret of the fact that we have steadily reduced our store portfolio in recent years and shall continue to do so as leases expire. We are looking at options to accelerate these store closures,” the spokesperson further added. Deloitte has declined to comment on the matter.
London - JD Sports has bucked the trend of the UK’s harsh retail environment, posting an almost-doubled revenue in its latest results for the 52 weeks to February 2.
The sports retailer’s revenue was up 49.2 percent to 4.7 billion pounds for the period, with profit before tax increasing by 15.4 percent to 339.9 million pounds. The group’s EBITDA also increased by 26.8 percent to 488.4 million pounds, while gross profit dropped to 47.5 percent from 48.4 percent the year before. The group’s pre-tax profit increased by 15 percent to 339.9 million pounds compared to 294.5 million pounds.
JD Sports executive chairman, Peter Cowgill, said in a statement: "We firmly believe that the elevated and dynamic multibrand multichannel proposition of the core JD fascia, which enjoys the ongoing support of the key international brands, has the necessary agility to continue to exceed consumer expectations and prosper in an increasing number of international markets.
"We believe that our acquisition of the Finish Line business in the United States, the largest market for sport lifestyle footwear and apparel and the home to many of the global sportswear brands, will have positive consequences for our long-term brand engagement whilst significantly extending the group's global reach. We maintain our belief that Finish Line is capable of delivering improved levels of profitability."
Continued growth in Europe and Asia Pacific
JD said it now has a presence in 10 countries in mainland Europe with its first store in Austria at Mariahilfer Strasse in Vienna expected to open later in the first half. The JD fascia also saw a net increase of 39 stores in the period with new stores in all of the retailer’s existing territories as well as its first two stores in Finland.
Its team in Iberia is also progressing with an “accelerated process to integrate the Sport Zone fascia into the Sprinter commercial operations, with works to expand the warehouse in Alicante to accommodate the Sport Zone stocks ongoing.” This integration process is expected to be “substantially complete” by the end of the first half.
Across the Asia Pacific region, the retailer has opened its first stores in Singapore, Thailand and South Korea with its local partner Shoemarker Inc, and now has 16 JD stores, including 14 conversions of the multibrand Hot-T fascia which was acquired in the previous year.
Images courtesy of JD Sports/Silverburn
Mike Ashley’s Sports Direct is reportedly set to close its packing facility in Wigan, Greater Manchester on June 13, resulting in 300 job losses.
Workers from the Wigan warehouse were informed of the news on Monday, according to the Guardian, with a source telling the British news publication that the sports retailer had exercised its right to end its 10-year lease on the warehouse prematurely.
Britain’s general union GMB described the closure as a ‘body blow for the North West’ on its website. “This closure is another body blow for the North West – caused by a company with a track record of putting profits before people,” Paul McCarthy, GMB regional secretary, said in a statement.
“The hard-working, dedicated staff at the warehouse have already been put through the grinder once when the site was run by JJB - and now this. GMB will not rest until every member receives the redundancy pay they are legally entitled. Then we will discuss next steps.”