BMTC sales in 4Q, year flat due to competition, strike
'04 earnings up 20%
By Furniture Today Staff -- Furniture Today, March 21, 2005
MONTREAL -- The entry of rival retailer The Brick into Quebec helped keep sales flat in the fourth quarter and year for BMTC, whose performance also was dragged down by a three-week strike at its distribution center here and by strong price deflation in consumer electronics.
Sales in the fourth quarter were C$212.6 million, unchanged from the prior year's final period. Net earnings plunged 30.9% to C$9.8 million from C$14.2 million a year ago. BMTC said quarterly earnings were hurt by the costs of stock options for senior management, and by reduced margins on consumer electronics, a key category in the pre-Christmas period.For the year, sales of C$801.8 million were essentially flat with 2003. But net earnings rose over 20% to C$44.5 million, compared with C$37 million in 2003.Chairman, President and CEO Yves Des Groseillers said 2004 "turned out to be quite good for big-ticket, consumer durable goods, thanks in large part to a favorable interest rate environment. Aside from consumer electronics, which are experiencing price deflation, demand for furniture and appliances remained strong."He said two things hampered BMTC's performance: "The first reason, which was well anticipated, was the entry of new competitors into the market. The second, unanticipated reason was a three-week strike at the distribution center." The latter, in April, created a significant inventory backlog and limited the company's ability to stock seasonal and promotional items which, in turn, hampered its normally aggressive promotions, Des Groseillers said.
He expects business to return to normal in 2005: "Market conditions are generally positive and the year ahead should see good growth rates in most of the company's product lines."But Des Groseillers also sees continued retail consolidation as competitors seek to create ever-larger economies of scale.BMTC operates 23 stores throughout Quebec under the Brault et Martineau and Ameublesments Tanguay banners. It is the No. 1 furniture and bedding merchant in Quebec and the fifth largest in Canada.
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