Lillian Vernon lays off workers
March 19, 2001,
RYE, NY -With sales falling off in an uncertain retail environment, catalog retailer Lillian Vernon Corp. said it will lay off 12 percent of its work force and close its Las Vegas call center, consolidating operations into its Virginia Beach, VA, facility.
After restructuring charges totaling about $1.5 million on an after-tax basis, the company forecast that net income and earnings per share for the fiscal year ended Feb. 24 will be "in the range of break-even to a small loss," down from a profit of $6.3 million, or 69 cents a share, the prior year.
Lillian Vernon, chairman and ceo, said, "Like most retailers, we are experiencing the economic downturn, and consumers are continuing to reduce their spending. Our company is taking the necessary measures to bring our overhead, including operations, staff and discretionary spending, in line with our current revenue projections."
During the third quarter ended Nov. 25, Lillian Vernon's sales declined by 6.9 percent, to $98.3 million from $105.6, and earnings fell by 32.3 percent, to $6.6 million from $9.7 million. For the nine months year to date, sales increased by 2.7 percent, to $174.8 million, and earnings were down by 33.4 percent, to $3.6 million from $5.4 million.
Responding to the downturn in sales, Vernon said, "We have aggressively reduced our inventory by 9 percent, or $3 million, from fiscal 2000. Our company remains strong with no outstanding debt and approximately $32 million of cash reserves at fiscal yearend."
As of March 8, the retailer said it had repurchased 758,392 shares of its common stock as part of a 1.5 million share repurchase program. The company said it will continue to buy back shares "from time to time as conditions warrant." In September 1998, the retailer completed an earlier buyback of one million shares.