Value City widens loss
June 11, 2003-- Home Textiles Today,
Columbus, OH — Hobbled by stagnant sales, rising costs, lower margins and sharply higher interest expense, Value City Department Stores recorded a widening first-quarter loss of $13.1 million, almost triple the size of a year-ago deficit of $4.8 million.
Sales at the diversified retailer — parent of Value City, Filene's Basement and DSW Shoe Warehouse — were virtually flat, inching up by 0.4 percent, to $488.5 million from $585.9 million in 2002. In a weak retail environment, same-store sales fell by 4.4 percent, compared to a flat performance last year.
Producing the deep quarterly deficit, in addition to weaker same-store sales, the spread between rising costs and falling margins grew wider, with expenses exceeding declining gross margin dollars by more than $14 million during the opening quarter, producing an operating loss $14.3 million, up sharply from last year's operating loss of just $83,000.
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