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Bombay Posts 4Q Loss, Plans to Close Stores

Clint Engel -- Gifts and Dec, 3/27/2006 9:40:00 AM

Fort Worth, Texas—Specialty retailer The Bombay Company posted a $25.1 million loss in its fourth quarter, and said it plans to close a net 33 to 38 stores this year.

The chain—which, in addition to furniture, sells gifts, games, home accessories, bath and spa products—said special charges and declining sales contributed to the loss. In addition to the store closings, Bombay will continue migrating stores to off-mall locations. It also will test new merchandise and merchandising techniques, including a bath category, and try smaller but more frequent product introductions.

The company, which is seeking a successor to Chairman and CEO James Carreker, set to step down in June, said it is interviewing quality candidates, although the search committee hasn't yet made a recommendation.

The $25.1 million net loss in the quarter ended Jan. 28, compares to a $7.1 million profit in the comparable quarter last year. The results included non-cash and other charges of $29.1 million, mainly related to an accounting change involving valuation of deferred taxes. Without the charges, Bombay would have had net income in the quarter of $4 million, or 11 cents per share, just above its guidance. Revenue dropped 8.1 percent to $186.9 million from $203.4 million in the fourth quarter a year ago, and same-store sales decreased 4.3 percent.

For the year, the 498-store retailer reported a loss of $46.7 million, including the charges, compared to a $12.6 million loss a year ago. Revenue dipped 1.9 percent to $565.1 million.

The recent downturn in results prompted Bombay to conduct a thorough review of stores, and it identified about 25 unprofitable units that will close this year. An additional 35 to 40 stores are expected to close as leases expire, although some will be relocated. The net result should be a drop in store count at the end of the year to 460 to 465 stores from the current 498 units, Bombay said.

—Clint Engel is an editor with "Furniture Today," a sister publication of "Gifts & Decorative Accessories."

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