Hanover puts tough 2Q behind it
Home & Textiles Today Staff -- Home Textiles Today, August 11, 2004
EDGEWATER, N.J. — While Hanover Direct's net income for the second quarter ended June 26 wasn't substantial — just $600,000 — it did represent the company's third profitable quarter in a row. Hanover eked out the gain despite an 8.9 percent drop in sales to $96.5 billion.
Tight vendor credit and lower borrowing availability kept second quarter inventories low, hampering sales, the company reported. With inventory flow sputtering, Hanover also suffered during the quarter from lower product fill rates as well as higher back orders and cancellations.
The company pumped up its liquidity last month with a new loan and amended credit facility, bringing liquidity to $25 million in the aggregate. The new arrangements "provide the company with adequate liquidity to support its business," said Wayne Garten, president and CEO.
Hanover's Internet sales continued to grow during the quarter — even with the inventory shortages — and accounted for 31.1 percent of revenues versus 27.5 percent in second quarter 2003. Online sales during the quarter grew 2.9 percent to $28.3 million.
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