LNT enacting measures to narrow losses
GDA Staff -- Gifts & Dec, March 20, 2008
Clifton, N.J. – Linens ’n Things managed to hold the top line fairly flat during the fourth quarter, but its net loss nearly tripled as margins fell away amid climbing costs and a promotional selling cycle.
“Even as we continue to move forward with the turnaround of the business, buffeted at the same time by a declining home category, exacerbated by the deterioration of the real estate market, coupled with the credit crunch only to be followed by a potential economic recession, we are still confident about our brand and about our business,” chairman and ceo Robert DiNicola said during the company’s year-end conference call this morning.
DiNicola added that while the business has stabilized operationally, “financially we still have a big hill to climb.”
Toward that end, LNT will begin implementing a series of measures to cut costs. They include reducing store-level staffing, paring back marketing, tightening capital expenditures, thinning inventory purchases and possibly closing or subleasing some of its 589 stores.
“None of this will be apparent to the customer when they arrive at the store. We’ve looked at some areas within our operation that are non-critical to the overall everyday activities that go on in the store,” said DiNicola. He also noted there would be “no massive reduction in inventories.”
He pointed to home textiles as a relative bright spot, with fashion bedding one of the strong performers in the category.
For the quarter ended Dec. 29, LNT’s net loss widened to $62 million from $22.5 million in the year-earlier period. Sales held steady at $962.9 million, up 0.6%. Comps dipped 1.0%.
During the holiday sales period – Nov. 23 (Black Friday) to Dec. 29 – comps rose 0.9%.
For the fiscal year, LNT generated a net loss of $242.1 million vs. a net loss of $154.4 million during the previous fiscal year. Sales fell 0.9%, with comps declining 3.4%.
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