Mr. Barenbaum continued, “We announced last week that Joel Waller, a retail veteran with a strong industry background, joined us as President. While I am confident he will add value in all aspects of our business, his primary focus will be on product development, sourcing and merchandising. Joel and I are committed to revitalizing the business and getting the Company back on track to profitability.”
Results for the Nine Months Ended November 26, 2011
- Net sales were $344.0 million, as compared to $348.5 million for the nine months ended November 27, 2011. Same store sales declined 3% in the first nine months of fiscal 2012.
- Operating loss totaled $39.2 million, or 11.4% of net sales. This compares to operating income of $6.0 million, or 1.7% of net sales, for the comparable nine month period last year. Operating loss for the first nine months of fiscal 2012 includes the aforementioned asset impairment and restructuring charges.
- Net loss totaled $39.3 million, or $1.11 per share, which includes $12.2 million, or $0.34 per share, of restructuring and estimated asset impairment charges. This compares to a net loss of $5.4 million, or $0.15 per diluted share, for the first nine months of fiscal 2011, which included severance charges of approximately $0.03 per share and a non-cash charge of $0.36 per share related to the valuation allowance on deferred tax assets referenced above.
Asset Impairment and Restructuring Charges
On November 11, 2011, the Company announced its plans to close approximately 100 stores, most of which are underperforming. A majority of the stores are planned to close by January 2012. In the third quarter, the Company recorded an estimated non-cash asset impairment charge of $11.4 million related to the closing stores and to stores it plans to continue to operate and which are targeted for rent renegotiation. The Company also recorded approximately $0.8 million of severance charges in the third quarter related to closing stores and an October reduction in force.