Small profit means big swing for Hanover
May 12, 2004-- Home Textiles Today,
EDGEWATER, N.J. — Putting behind it a costly preferred stock dividend that pushed the retailer into the loss column last year, Hanover Direct Inc. recorded a modest first-quarter profit of $417,000, compared with a year-ago deficit of $3.4 million.
The swing back to profitability came as the direct-mailer and Internet retailer — parent of Domestications and The Company Store — eliminated a preferred stock dividend that cost it $3.6 million last year as part of a sweeping recapitalization.
Hanover sales decreased 7 percent, to $95.3 million from $102.5 million last year, largely due to a reduction in circulation at one of the company's catalogs in order to cut production and inventory costs tied to the catalog. Most of those cuts, the company said, took place in the first quarter, but ongoing cuts will continue to have an impact on sales moving further into the year, "albeit at a lower rate of decline."
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