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Stein Mart hindered by home departments

Jacksonville, Fla. – Promotional softlines retailer Stein Mart turned in one of its “worst” third quarters ever -- and cited its perpetually downtrodden home area as one of the main hindrances.

Said Linda Farthing, the 276-unit retailer’s president and ceo who assumed her posts two months ago: “Our third-quarter performance was unacceptable. We were unable to drive sales, resulting in our worst third quarter comp performance in recent history.”

For the quarter, Stein Mart reported a net loss of $2.7 million, down from net income of $237,000 in the year-ago period. Sales fell 1.7% to $333.3 million as comps dropped 6.3%. Gross margins fell 40 basis points to 25.9% of sales, while SG&A costs soared 190 basis points to 29.2% of sales.

The home business segment, specifically, “continues to track well below the company trend,” Farthing said. “Fixing this area is a priority, but in a soft housing market, we have additional challenges. We are looking at alternatives to maximize the productivity of the home square-footage.”

Such alternatives could include a scaling down or elimination – in part of whole – of the home division – an assumption based on Farthing’s response to an analyst’s question on this possibility. “What we are looking at is the productivity of each square foot in our stores, and you can take it from there,” she said.

During the quarter, home’s gifts and linens categories were down double digits, said James Delfs, svp, cfo. “Linens, furniture and home décor continue to significantly under-perform,” he continued. “And home, for the year is down double digits.”

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