LNT sheds light on business
August 14, 2007-- Home Textiles Today,
Clifton, N.J. – While Linens ’n Things’ senior executives emphasized areas of progress, particularly in textiles, during today’s quarterly conference call, analysts and debt-holders appeared to be more focused on liquidity, inventory levels, markdowns and clearance rates.
When the call began at mid-day, chairman and ceo Robert DiNicola promised to spend as much time as necessary responding to questions, and participants took him up on the offer in a Q&A session that ran nearly three hours.
LNT executives emphasized that when the company amended its financial instruments during the second quarter by $100 million, bringing availability to $700 million, it did so to ensure it had liquidity in excess of its anticipated needs.
“All vendors are being paid in a timely manner according to terms, and in full,” said Frank Rowen, svp and cfo. DiNicola said there had been no significant changes in terms being offered to the retailer’s approximately 1,100 vendors, whom he praised for their understanding during the first 18 months of the multi-year turnaround period.
Asked about where the company stands vis-à-vis factors, the pair demurred, saying the factoring relationship was one held between vendor and factor.
During the first half of the year, LNT posted a net loss of $100.2 million, an improvement over the net loss of $104.6 million during the first half of last year. Sales fell 3.3% to $1.165 billion. Comps declined 6.3%.
Net loss for the quarter ended June 30 was $42 million, slightly wider than the net loss of $39.1 million in last year’s second quarter. Sales slipped 2.9% to $593.6 million. A comp decline of 7.3% was partially offset by the opening of seven new stores.
Executives could point to some successes, notably comp store sales improvements month-by-month sequentially through the quarter as well as higher gross margins. DiNicola asserted that balance of the mix has also improved in the two key areas of textiles and housewares.
“In certain parts of the textiles business, we’re very pleased with amount of progress we’ve been able to make a short amount of time,” said DiNicola. “Remember, it’s been many years since Linens ‘n Things had anything positive to talk about in textiles.”
He added: “We feel good about the sales momentum moving into back-to-school. We feel even better about textiles and housewares. We continue to improve in all regions [of the country], though much more work remains to be done.”
Asked about the fate of the Nate Berkus program, DiNicola said LNT will continue to flow new goods through the balance of the year. The fate of the captive celebrity brand beyond that point is currently under negotiation.
Related Content By Author
Industry Related Content
Previewing Rug Trends: Outdoor