Delia's records 1Q losses of $8.3M
June 25, 2001,
New York — With sales falling off after the sale of some of its businesses, and margins thinning out as well, Delia's Corp., a retailer of apparel and home fashions to teenage girls and young women, posted a modestly narrowed loss of $8.3 million, compared with a prior-year deficit of $8.7 million.
Sales dropped off by 26.1 percent, to $36.2 million from $49.1 million after the earlier sale of non-core businesses.
Contributing to this year's quarterly loss, in addition to the lower level of sales, average gross margin thinned by 170 basis points, to 45.7 percent from 47.4 percent a year ago. But more than offsetting the margin erosion, Delia's hacked away at costs, reducing its expense ratio - costs as a percentage of sales - to 67.5 percent from 79.5 percent a year ago in the wake of the asset sales. Measured in absolute dollars, costs were cut by 37.3 percent, to $334.5 million from $349.0 million, a cash savings of $14.5 million.
Stephen Kahn, ceo, said, "In the first quarter, we posted positive comparable store sales in the mid-single-digits despite a weak retail environment. On the Direct side [catalog and website], we were pleased by the continued shift in sales to our Internet channel; however, business was affected by some merchandising miscues. We moved quickly to address these issues, and believe we are now well positioned for the key Back-to-School season."
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