Garden Ridge ups gross margin, works through bankruptcy
December 14, 2004-- Home Textiles Today,
HOUSTON — Garden Ridge Corporation reported a profit (before bankruptcy costs) for the month of November due in large part, it said, to a 2 point increase in product gross margin, despite a 2.8 percent decline in comp sales.
The company has also signed four new lease amendments in its negotiations with landlords, bringing the total to 24 finished. The lease amendments are subject to bankruptcy court approval.
"November sales were flat as we focused on better management of our inventories and margins. In contrast, we have a really strong start to December sales with comps over 7 percent and margins up positively over last year," said Steve Higgins, president of Garden Ridge. "We are excited by the strong customer response to our seasonal and home decor merchandise. Our average ticket in December is up by nearly 9 percent and we are well positioned to continue this sales trend to the end of the year."
During a bankruptcy court hearing in late November, Garden Ridge also secured an extension to Jan. 17 of its right to file a plan of reorganization. "This extension gives Garden Ridge a better opportunity to complete its plan of reorganization with the creditors," said Don Martin, chief restructuring officer for the company.
Bank of America has also submitted terms for an extension of debtor-in-possession as well as exit financing to Garden Ridge. The company said it is in the process of evaluating this proposal as well as seeking alternative sources.Any such financing would be subject to bankruptcy court approval.
Garden Ridge filed for Chapter 11 protection in February 2004 citing the need to re-negotiate store leases and other contracts with above-market rates as one of its principal reorganization objectives.
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