Bombay Company Reports December Revenue Decline
Furniture World Magazine
he Bombay Company, Inc. reported that total revenue for the five-week period ended December 31, 2005 decreased 6.4% to $100.5 million from $107.4 million for the five week period ended January 1, 2005. Same store sales for stores open more than one year declined 3.5%. Total revenue for the forty-eight week period ended December 31, 2005 decreased 1.7% to $528.7 million compared to $538.0 million for the comparable period last year. Same store sales declined 2.0% for the year-to-date period.
James D. Carreker, Chairman and Chief Executive Officer, noted, "The holiday season was much softer than we had anticipated. As part of our strategic repositioning, the decision to improve the quality of our merchandise and increase average unit retail prices adversely affected conversion rate, particularly in the mall-based stores during the holiday period. We believe that the changes are critical to positioning ourselves for the future although adversely affecting short-term results. Customers in our off-mall locations responded more positively than the mall customers, which we believe validates our strategy to continue the migration of store locations from mall to off-mall.
"While we were pleased with the sales of our seasonal product, we experienced weak sales of decorative accessories, jewelry boxes, small accent tables and clocks. We believe that there is an opportunity to improve sales through improved presentation for the holidays. Early in December, we realized that, during the holidays, presenting giftable items within the 'rooms' format was not as effective as our traditional 'classification' style of presentation. We subsequently increased our presentation of giftable items by massing them throughout the store. Next year, we plan to clear more furniture floor models in advance of our holiday presentation, which will allow for better classification presentation for the period between Thanksgiving and New Years.
"For December, Canada reported a low single digit increase in same store sales while the US operations reported a mid-single digit same store sales decline. Our off-mall stores had positive same store sales and outperformed our mall-based stores. Some of our older mall-based stores continue to generate negative same store sales and increased losses. We are investigating the early closing of under-performing locations and accelerating the shift in the mix of real estate portfolio from mall to off-mall."
Based upon November and December results, the Company expects fourth quarter earnings per share to be in the range of $.04 to $.10 per share before potential non-cash charges associated with asset impairment, valuation allowances and strategic changes that management believes are necessary. Although sales were lower than anticipated, the Company expects to year-end inventory levels to be within the $132 to $138 million range previously indicated. As of the end of the month of December, the Company has repaid all of its seasonal borrowings and has no long-term debt.
The Bombay Company, Inc. designs, sources and markets a unique line of home accessories, wall decor and furniture through 501 retail outlets, specialty catalogs and the Internet in the U.S. and internationally.