The Elder-Beerman Stores Corp incurred a net loss of $1.4m for the 13 weeks ended October 28, 2000, excluding $10.7m in pre-tax charges relating to the company's new strategic plan announced on August 11, 2000 and the closing of one store. Normalised basic and diluted earnings per share equaled a loss of $0.10, compared to income from continuing operations of $0.05 in the third quarter of 1999. Including the charges relating to the strategic plan and store closing, Elder-Beerman incurred a net loss of $8.2m or $.58 per basic and diluted share for the third quarter.

Total revenues for the quarter rose 3.9 per cent over last year to $161.9m. Total sales for the quarter increased 3.7 per cent over last year to $154.6m, and comparable sales for the quarter increased 0.7 per cent. Third quarter comparable sales reflect sales for stores open more than 13 months.

Frederick J. Mershad, chairman and chief executive officer, stated, "The retail landscape is changing and Elder-Beerman is evolving through its three-part strategic plan to meet our customers' needs. Since the announcement of the plan in August, we have been working hard on its implementation. We believe that our strategic plan provides the best opportunity to compete for customers' business and grow in today's retail environment."

The new strategic plan calls for:
A shift in the company's merchandising strategy to provide a better value proposition to customers. The company will intensely focus on five businesses - ladies' and men's moderate sportswear, denim, textiles, and shoes - and plans to emphasise its strong cosmetics business as a differentiator from discounters and other moderate department stores. The company's goal is to offer customers a competitive combination of price and selection of merchandise in these categories. The customers will see the full effect of this strategy beginning in Spring 2001.

Growth of new concept stores. The company had two successful new concept store openings in October 2000 in Howell, Michigan and West Bend, Wisconsin, and opens its third new concept store this year today (November 17) in Jasper, Indiana. This gives the company five new concept stores, with plans to accelerate new concept store growth in 2001. The company has already announced one new store for Spring 2001 in Stevens Point, Wisconsin.

Located in smaller, underserved markets, the concept stores emphasise convenience and service, with unique features such as centralised customer service centres that are always staffed, self select formats in cosmetics and shoes, and The Zone, a combined juniors and young men's shop that creates an exciting specialty store within a store.

A more efficient organization. The company expects to achieve expense reductions of $10m to $12m pretax in fiscal 2001 and an additional $5-$7m pretax in fiscal 2002. These savings will be achieved by tailoring the Elder-Beerman organization to provide only those functions essential to support the strategic plan, and by reengineering many functions in the company to make them more efficient.

In commenting on the strategic plan, Mershad said: "Our ultimate goal is to bring value to our shareholders. We feel that the best way to achieve that goal is by offering a better value proposition to our customer - a competitive combination of price and selection in our merchandise and convenience and service in our stores. Our strategic plan is focused on achieving these goals."

Regarding the third quarter, Mershad added, "Due to slower sales than planned in the third quarter, we increased our markdown rate to clear slow moving merchandise. Because of this disciplined approach, our inventory levels are on plan as we approach the Christmas shopping season in the fourth quarter."

About Elder-Beerman
The US's ninth largest independent department store chain, the Elder-Beerman Stores Corp is based in Dayton, Ohio and operates 63 stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Elder-Beerman also operates two furniture superstores.