US: Wilsons The Leather Experts widens Q2 loss
Leather outerwear and apparel retailer Wilsons The Leather Experts Inc said yesterday (21 August) that its second quarter loss has widened on lower sales and extensive markdowns.
Net loss for the quarter was $29.4m, or $1.17 per share, versus a loss of $24.5m, or $0.63 per share in the same period last year. However, excluding charges related to equity financing, the net loss was $0.75 per share the company said.
For the three months to 4 August, net sales fell 11.3% to $43.6m from $49.2m in the same period last year. Comparable store sales dropped 11.9%.
Michael Searles, chief executive officer, blamed the "poor" second quarter performance on soft sales and extensive markdowns as the company tries to make room for new designer brand outerwear.
"As a result of our extensive markdowns, gross margin during the quarter was negative $2.4m compared to a positive margin last year of $1.9m," he said.
Year-to-date net loss was $50.6m, or $1.72 per share compared to a net loss of $31.0m, or $0.79 per share in the first half of 2006. In the first half sales fell 18.3% to $101.2m from $123.8m, with same-store sales dropping 17.2%.
Mr Searles added: "Dollars per transaction in our mall stores are up 17.7% year-over-year. We just have not had enough new customers to offset the ones who have left us. Our branded product offering is designed to help recapture some of those customers who have left us."
Wilsons Leather operates 411 stores in 45 states.
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