1Q Sales Down, Losses Up at Eddie Bauer

May 31, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2006 Eddie Bauer reported a loss of $35.6 million on sales of $194.5 million in first-quarter 2006. Sales for the period ended April 1 were off 12.3 percent from last year’s first quarter, when the Redmond, Wash.-based outdoor lifestyle retailer lost $16.1 million.

Historically, Bauer lost $8.6 million in the first quarter of 2005, when it was a wholly-owned subsidiary of Spiegel, which spun off Eddie Bauer last June as part of its Chapter 11 bankruptcy reorganization. The $16.1 million loss Bauer reported for first-quarter 2006 reflects the implementation of the former parent company plan and emergence from bankruptcy as if it had been completed at the beginning of 2005.

Eddie Bauer’s total first-quarter 2006 revenues included net merchandise sales of $180.6 million, compared to $206.6 million in the prior year.

Net merchandise sales for this year’s first quarter included $125.9 million of sales from Eddie Bauer’s retail and outlet stores, $54.6 million of sales from its direct channel and $0.1 million of other merchandise sales. That compares to prior-year performance of $143.7 million of retail and outlet-store sales, $62.8 million of direct-channel sales, and $0.1 million in other merchandise sales.

First-quarter 2006 same-store sales declined 10 percent compared to the same period last year. the first quarter of 2005. The principal factor impacting the decline in gross margin percentage for first quarter 2006 versus the pro forma gross margin percentage for the prior year quarter was the higher level

Fabian Mansson, chief executive officer, said Eddie Bauer had expected a challenging first quarter.

“While we have taken aggressive steps to refocus our product collection to be better aligned with our core customers’ preferences, it is too soon to expect to see the impact of these efforts in the first quarter,” he said. “We do, however, remain confident in our direction. We believe that Eddie Bauer’s legacy and outdoor heritage continue to be strong differentiators for our brand in the marketplace, and we are taking steps to better leverage this key strength. We look forward to re-capturing positive momentum in our business and to capitalizing on the long-term potential of the Eddie Bauer brand.”

As of April 1, Eddie Bauer operated 265 retail stores and 108 outlet stores.