BMTC Group's sales, earnings climb in 4Q and year
By Michael J. Knell -- Furniture Today, March 18, 2007
Montreal — Despite what it described as a difficult environment, retailer BMTC Group reported sales and earnings gains for the fourth quarter and year.
In the quarter, revenues were up 5% from the same period a year earlier to C$220 million. Net earnings nearly doubled, to C$16.5 million from $8.6 million a year ago.
For the year, BMTC's revenue climbed 4% to C$835.7 million and earnings rose 9% to C$45.6 million.
"Following a disappointing first half of 2006, a strong third and particularly fourth quarter allowed the company to post respectable growth for the year, given the challenges faced in a difficult environment," said Yves Des Groseillers, BMTC chairman, president and CEO.
The two biggest challenges were the cost of financing sales promotions — which rose by 23% in 2006 — and continuing price deflation, particularly in appliances and electronics.
Des Groseillers also noted some significant changes in the Quebec competitive environment, including the launch of The Brick in the province and the expansion of sleep specialist Dormez-vous after its acquisition by Sleep Country Canada.
BMTC operates 28 retail outlets in Quebec under three separate banners: Brault & Martineau, Brault & Martineau Sleep Gallery and Ameublements Tanguay.
During 2006, the company sold two pieces of excess land in Kirkland and Ste-Thérèse, Quebec, and opened a 63,000-square-foot Brault & Martineau liquidation center in the Montreal suburb of Ville St-Laurent.
In October, the company opened its 11th Brault & Martineau Sleep Gallery, which Des Grosseillers said was "the first to be situated outside of a regular store." This year, the retailer plans to open six more of the sleep galleries, he said.
He also said that a similar sleep specialist will be launched under the Ameublements Tanguay banner later in the year.
"The market environment for the company is improving, or at the very least management expects it will stop deteriorating," Des Groseillers said. "Interest rates peaked early in 2006; therefore, the company does not anticipate the same increase in financing the costs of sales promotions, which had been running in the double digits."
Deflation, especially in white and brown goods, seems to have worked its way through the system and BMTC believes this will have less influence on results.
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