Jennifer Posts First-Quarter Loss

January 10, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on January 2007 Jennifer Convertibles reported revenue from continuing operations of $32.7 million and a loss of $637,000 in its first fiscal quarter, which ended Nov. 25.

Revenue was down 8.5 percent compared to last year’s first quarter, when the company had net income of $848,000. That prior-year quarter included a $195,000 gain from the early termination of a lease for a store which was closed in June 2005.

Operating margins from continuing operations decreased in the first quarter to 29.9 percent from 32.4 percent during the same period last year. Same-store sales were off 9 percent.

During the quarter, Woodbury, N.Y.-based Jennifer did not open any stores and closed one store, located in Woodland Hills, Calif.

“The softness that has been experienced for some time in the retail furniture industry finally impacted our results,” said Harley Greenfield, Jennifer’s chief executive officer, in a release Tuesday announcing results. “As I had indicated previously we noticed a softening in demand at the end of our fourth fiscal quarter. We have made a number of changes including adjustments to margins, merchandising strategies and advertising and believe that these changes will return the Company to profitability in the near future, even if the softness in the industry continues.”

On the positive side, Greenfield pointed out that cash and investments increased to more than $15.5 million; and that customer deposits, which result in future sales, increased by almost $3.5 million at the end of the quarter.

Jennifer also expects to open its first Ashley Furniture HomeStore by the end of April.

“This store will be more than 40,000 square and located on Glen Cove Road in Carle Place, N.Y.,” Greenfield said. “We are currently in the process of evaluating locations for our next two Ashley Furniture HomeStores. We believe based on our analysis of stores in similar metropolitan areas that these stores will add substantial growth to our solid Jennifer base as we expect each store to generate between $15 (million) and $20 million in revenues with solid profits.”

Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 171 Jennifer Convertibles stores. The company also has 16 Jennifer Leather specialty stores. The company owned 163 stores and licensed 24 stores.