10 Retail Candidates for the Endangered Species List
As we have seen in the unfolding sovereign debt crisis in Europe the economic rebound is still tenuous and uneven. Many retailers in the first quarter have posted strong sales and profits while many others have yet to turn a corner. Ten retailers including A&P, Borders and Charming Shoppes fall into the biggest loser category after posting plunging sales or filing for bankruptcy. Some retailers are even candidates for the endangered species list. Find out which 10 retailers are still posting sharp declines and struggling.
A&P: The grocery chain reported a loss of $171.4 million in its fourth quarter. Same-store sales fell 4.8 percent. For the full fiscal year ended February 27, 2010, the retailer posted a net loss of $876.5 million. Annual sales fell to $8.8 billion, from $9.5 billion reported the previous year.
Blockbuster: The video chain reported a loss of $65.4 million in its first quarter, compared with a net gain of $27.7 million in the year-ago period. For the quarter ended April 4, 2010, sales decreased to $939.4 million from $1.09 billion. In response, Blockbuster has laid out a string of financial initiatives including plans to lower debt service costs, reduce operating expenses, and improve top-line performance.
Borders: Despite an earnings boost during the first three months ended January 30, 2010, the chain reported sales fell 13.3 percent to $946.5 million. Comp-store sales fell 14 percent at Borders stores and dropped 8.5 percent at Waldenbooks. The company has closed five of its namesake stores and 186 Waldenbooks during the quarter.
Cache: The fashion chain reported a loss of $4.1 million in its first quarter, compared to a loss of $1.6 million in the year-ago period. Sales for the quarter decreased 8.4 percent to $48.6 million, from $53.0 million in the year-ago period. Same-store sales for the quarter decreased 6.8 percent.
Charming Shoppes: Parent company of Lane Bryant, Fashion Bug and Catherine's stores lost $12.1 million in its fourth quarter. The company plans to cut costs by negotiating lease terms with landlords and closing 100 to 120 underperforming stores this year, for which it will incur charges of about $7 million to $9 million
Cost Plus: Despite a profit gain during its fourth quarter, the home décor chain reported sales declined 4.6 percent to $320 million. Same-store sales dropped 2.5 percent.
Movie Gallery: The second largest video rental chain, which filed bankruptcy for the second time on February 2, 2010, plans to close 2,415 U.S. stores and is liquidating. Movie Gallery faces more than $540 million in debt that was mostly created from its 2005 acquisition of Hollywood Entertainment, which was acquired for $800 million.
Rite Aid: The drugstore chain reported a loss of $210.6 million for the three months ended February 27, 2010 -- marking its 11th straight quarterly loss -- compared to a loss of $2.3 billion reported a year ago. Revenue fell 3.6 percent to $6.46 billion. Rite Aid closed 22 stores during its fourth quarter and 138 during the past year.
Rock & Republic: The trendy fashion brand filed Chapter 11 on April 1, 2010 and plans to reorganize. According to company, the bankruptcy filing will enable it to alleviate balance sheet burdens and restructure its operations. The brand also obtained a $7.5 million debtor-in-possession financing facility from CIT Group.
Swoozies: The gift and parties good retailer filed for Chapter 11 on March 2, 2010 and plans to liquidate it 43 locations. The company owes more than $5 million to its top 40 trade creditors and plans to sell its assets to Hilco Merchant Resources, who will conduct the going-out-of-business sale.
A&P: The grocery chain reported a loss of $171.4 million in its fourth quarter. Same-store sales fell 4.8 percent. For the full fiscal year ended February 27, 2010, the retailer posted a net loss of $876.5 million. Annual sales fell to $8.8 billion, from $9.5 billion reported the previous year.
Blockbuster: The video chain reported a loss of $65.4 million in its first quarter, compared with a net gain of $27.7 million in the year-ago period. For the quarter ended April 4, 2010, sales decreased to $939.4 million from $1.09 billion. In response, Blockbuster has laid out a string of financial initiatives including plans to lower debt service costs, reduce operating expenses, and improve top-line performance.
Borders: Despite an earnings boost during the first three months ended January 30, 2010, the chain reported sales fell 13.3 percent to $946.5 million. Comp-store sales fell 14 percent at Borders stores and dropped 8.5 percent at Waldenbooks. The company has closed five of its namesake stores and 186 Waldenbooks during the quarter.
Cache: The fashion chain reported a loss of $4.1 million in its first quarter, compared to a loss of $1.6 million in the year-ago period. Sales for the quarter decreased 8.4 percent to $48.6 million, from $53.0 million in the year-ago period. Same-store sales for the quarter decreased 6.8 percent.
Charming Shoppes: Parent company of Lane Bryant, Fashion Bug and Catherine's stores lost $12.1 million in its fourth quarter. The company plans to cut costs by negotiating lease terms with landlords and closing 100 to 120 underperforming stores this year, for which it will incur charges of about $7 million to $9 million
Cost Plus: Despite a profit gain during its fourth quarter, the home décor chain reported sales declined 4.6 percent to $320 million. Same-store sales dropped 2.5 percent.
Movie Gallery: The second largest video rental chain, which filed bankruptcy for the second time on February 2, 2010, plans to close 2,415 U.S. stores and is liquidating. Movie Gallery faces more than $540 million in debt that was mostly created from its 2005 acquisition of Hollywood Entertainment, which was acquired for $800 million.
Rite Aid: The drugstore chain reported a loss of $210.6 million for the three months ended February 27, 2010 -- marking its 11th straight quarterly loss -- compared to a loss of $2.3 billion reported a year ago. Revenue fell 3.6 percent to $6.46 billion. Rite Aid closed 22 stores during its fourth quarter and 138 during the past year.
Rock & Republic: The trendy fashion brand filed Chapter 11 on April 1, 2010 and plans to reorganize. According to company, the bankruptcy filing will enable it to alleviate balance sheet burdens and restructure its operations. The brand also obtained a $7.5 million debtor-in-possession financing facility from CIT Group.
Swoozies: The gift and parties good retailer filed for Chapter 11 on March 2, 2010 and plans to liquidate it 43 locations. The company owes more than $5 million to its top 40 trade creditors and plans to sell its assets to Hilco Merchant Resources, who will conduct the going-out-of-business sale.