— Furniture Today,
FORT WORTH, Texas (PR) — The Bombay Company
reported that revenue for the third quarter decreased 15.5% to $108.2 million compared to $128.1 million for the three months ended October 29, 2012.
Same store sales for Bombay stores operating for more than one year decreased 15.5% for the quarter. Revenue from retail stores declined to $100.2 million from $121.6 million due to the decrease in same store sales and a lower store count.
Bombay’s direct- to-customer business, which includes Internet and Mail Order, grew to $7.4 million for the quarter compared to $5.5 million last year, driven primarily by Internet sales. The loss before income taxes for the quarter ended October 28, 2013 was $16.0 million compared to $6.5 million for the quarter ended October 29, 2012.
The results for the 2012 quarter include a pre-tax gain of $4.1 million on the sale of non-operating land and a building. The net loss for the quarter ended October 28, 2013 was $15.6 million, or $0.43 per share, compared to a net loss of $4.4 million, or $0.12 per share, for the corresponding period of the prior year.
For the nine-month period ended October 28, 2013, revenue decreased 7.9% to $348.2 million compared to $378.2 million for the corresponding period of the prior year. Revenue from retail stores declined to $324.2 million from $354.1 million as a result of a 6.5% decline in same store sales and the reduced store count.
Revenue from Bombay’s direct-to-customer business grew to $21.2 million for the nine-month period compared to $15.2 million in the comparable year-ago period, primarily due to higher Internet sales. Results for the nine-month period ended October 29, 2012 include $6.9 million of revenue from Bailey Street operations, the assets of which were sold during the second quarter of Fiscal 2012.
The loss before income taxes for the nine months ended October 28, 2013 was $52.1 million compared to $33.3 million for the nine months ended October 29, 2012 which included $4.7 million of gains on sales of the non-operating land and building and the Bailey Street assets. The net loss for the nine-months ended October 28, 2013 was $51.1 million, or $1.42 per share, compared to a net loss of $21.7 million, or $0.60 per share, for the corresponding period of the prior year.
CEO David B. Stewart said: “We remain focused on implementing our plan to return Bombay to positive cash flow and improved operations. We made important progress with some key initiatives during the third quarter, which included cost-cutting measures, selling unproductive inventory, strengthening our merchandise presentation, and concentrating on our core product. Clearly, we are part of a troubled sector, and our numbers reflect that. We believe that we added to the problem by executing an overly zealous inventory reduction program that cost us sales. The good news is, we have made course corrections to improve inventory availability in coming quarters. While we are disappointed with the store results, we continue to be very pleased with the growth of our direct-to-customer business and in particular the Internet. Our Canadian subsidiary continues to outperform the U.S. market.
“During the third quarter, we began to differentiate the merchandising of our mall and off-mall stores for clearer product focus and a more customer friendly environment with the objective of improving our store results. We concentrated on increasing unit volume, and our stores have made progress with key product presentations. We realized the benefit of a number of the cost reductions that were identified during the second quarter and expect to continue to realize the benefit into Fiscal 2014. We trimmed our print advertising and enhanced our store marketing and e-marketing and we believe that this change in media has not adversely affected the business.
“We also began to convert square footage devoted to BombayKIDS into increased square footage for our core product. During the quarter, a total of 23 stores were converted, which resulted in all or a portion of the BombayKIDS product being replaced by core merchandise. We will continue to monitor the performance of these stores and manage the BombayKIDS business based upon the results. Key to the success of this initiative will be the introduction of new core product that is expected to arrive in stores during the spring of 2014,” Stewart concluded.
The company ended the quarter with $69.1 million in borrowings outstanding under its credit facility compared to $62.2 million last year. During the quarter, the company entered into a new credit facility that provides significantly more liquidity than its previous arrangement. The new facility will fund working capital requirements and will be used for other corporate needs, including the initiatives to focus on the company’s core business. Inventory levels were $151.7 million compared to $176.3 million due to the decision to reduce overall inventory levels and flow product, including holiday merchandise, closer to the time of need.
