Bombay Company presents results, says brand repos to pay in future
18 Aug '05
5 min read
"They clearly underestimated the extent of the markdowns required to accomplish the transition. As each store changed to the new presentation, floor models for items no longer having a place in that particular store were aggressively discounted. Also, they reduced the overall number of SKUs as repositioned the merchandise assortment, which resulted in clearing approximately 700 SKUs. In addition, we aggressively discounted normal seasonal clearance, exiting the spring season in good position for the fresh fall product introductions. They estimate that incremental markdowns accounted for approximately 500 basis points of the margin decline this quarter while adversely impacting the top line as well," noted Carreker.
Overall transaction count, including new stores, increased 5 percent while the average ticket increased slightly during the quarter. Revenue from the direct-to-customer channel, which includes Internet and mail order, declined $2.5 million during the quarter. Actions to address marketing issues for these channels as well as enhance website functionality and appearance have begun. Revenue from Bailey Street Trading Company, the assets of which were sold during the quarter, were approximately $.5 million lower than last year.
During the quarter, the Company completed the move to a new, larger distribution center in Canada and began shipments during June. The new distribution center is expected to result in a reduction of off-site storage costsand improved operating efficiencies in that facility. Higher selling, general and administrative costs reflect higher store payroll costs due in part to the changes in the in-store merchandise presentation as well as costs to complete the merchandise study with Accenture. Corporate overhead costs were below last year's levels.
marketing@alchempro.com
