Bombay loses $2.2M in qtr.
By Furniture Today Staff -- Furniture Today, December 2, 2001
FORT WORTH, Texas — Stung by the aftermath of the terrorist attacks and by consumers shying away from big furniture purchases, The Bombay Company reported a $2.2 million net loss in its third quarter.
For the quarter ended Nov. 3, total revenues for the 427-store, Top 100 company grew 7% to $96.9 million, while same-store sales decreased 3%. The $2.2 million loss was up from a $1.6 million loss in the same period a year ago.
Through the first nine months, revenues increased 7.1% to $285 million, while the net loss rose to $7.9 million from $4.3 million in last year's nine months. Same-store sales were flat.
"While sales in August and early September were off to a good start, we quickly felt the results from the terrorist attacks on both our sales and margin performance," said Carmie Mehrlander, Bombay's chief executive officer.
She said furniture business continued to struggle in the third quarter as consumers avoided big-ticket purchases. The company planned for flat furniture sales for the period, but had a sales decline and lower margins in the category, Mehrlander said.
Positive results in upholstery, dining and home office furniture were offset by decreases in occasional, entertainment and bedroom furniture, with overall furniture business down 2% for the quarter versus the same period a year ago.
For the year to date, furniture accounted for 48% of the mix versus 51% a year ago, whiles accessories, which have been driving sales increases, grew to 36% from 34%.
The company, meanwhile, saw the successful launch of its Bombay Kids catalog and Internet business, featuring youth furniture groups with coordinating textiles and accessories.
Bombay began mailing 450,000 Kids catalogs to consumers Sept. 17 and, despite poor timing, results for the first month and a half have been good, Mehrlander said. A second catalog was mailed to 750,000 homes at the end of October featuring additional holiday-oriented accessories.
Mehrlander also said the company has been pleased with the startup of its international licensing program and with its Bailey Street Trading Company wholesale line, which was shown at the High Point market in October. The wholesale division is expected to reach $1.5 million to $2 million in sales for the year, she said.
The company anticipates a very promotional retail environment to continue to put pressure on margins in its fourth quarter. It foresees same-store sales decreases in the low to mid-single digits, and revenues of about $150 million to $155 million compared to $157 million last year.
Bombay plans to open 17 stores this year — somewhat less than previously anticipated — including 16 off-mall locations, three of which will be new larger-format test stores in the 7,000- to 8,000-square-foot range. It will close six stores.
| Quarter ended 11/3 | 2001 | 2000 | Change |
|---|---|---|---|
| Revenues | $96,945,000 | $90,855,000 | 6.7% |
| Operating income | (3,156,000) | (2,507,000) | — |
| Net income(a) | (2,233,000) | (1,637,000) | — |
| Earnings per share | (0.07) | (0.05) | — |
| 9 months ended 11/3 | 2001 | 2000 | Change |
| Revenues | $284,951,000 | $266,174,000 | 7.1% |
| Operating income | (12,599,000) | (7,695,000) | — |
| Net income(a) | (7,949,000) | (4,346,000) | — |
| Earnings per share | (0.24) | (0.13) | — |
| (a) Includes income tax benefits of $1.2 million in the 2001 quarter, $1.1 million in the 2000 quarter, $5 million in the 2001 nine months and $2.8 million in the 2000 nine months. | |||
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