A year of trials and errors took its toll on Wilsons the Leather Experts finances Tuesday as the chain sunk to a loss because of charges for its plan to close more than half of its 260 mall stores.
Wilsons' CEO Michael Searles said it was a disappointing year, as worried consumers couldn't be swayed into stores, even though the chain had begun selling designer coats and jackets from Calvin Klein and Nine West.
Searles said the company made "significant improvements and discoveries that will have a long-term impact on our operating results," but it wasn't enough.
"The bottom line is that we didn't turn the business around, and we disappointed our customers, our employees and our shareholders," Searles said in an afternoon conference call.
Wilsons announced last month that its name soon will be gone from store doors, and 160 mall-based stores will be shuttered by the end of June. The 100 remaining mall stores are being rebranded as "Studio," and will focus on handbags from known and emerging designers priced between $100 and $400.
Its 110 outlet stores will continue to operate as Wilsons.
For the quarter ending Feb. 2, the Brooklyn Park-based specialty retailer reported a loss of $8.4 million, or 23 cents a share, which included a $19.7 million store-closing charge. Last year, the company posted a profit of $21 million, or 31 cents a share. Without the charge, earnings would have been $11.3 million, or 16 cents a share.
Sales in the crucial quarter fell 8.7 percent to $121.4 million, compared with a year ago. For stores open more than a year, sales fell 2.4 percent. Historically, Wilsons has lost money in every quarter but the last.
Net sales for the year fell 12.7 percent to $280.4 million compared with last year. Same-store sales fell 10.4 percent.
The company reported a net loss for the year of $77.5 million, or $2.46 a share. Excluding the fourth-quarter store-closing charges and financing adjustments, the loss would have been $57.8 million, or $1.47 a share.
Searles said the designer brands significantly outsold the Wilsons brand, which it spent the last half of the year getting off its racks, but "it wasn't enough to offset the erosion in traffic we have continued to experience."
Wilsons shares closed at 72 cents, down about 11 percent. Nasdaq has warned the company that it has until August to raise its stock price above $1 or it will face delisting.
Jackie Crosby • 612-673-7335
wilsons the leather experts
4th quarter FY2007, 2/2
2007 2006 % chg. Revenue $121.4 $133.0 -8.7 Income -8.4 12.0 -- Net/cm -9.2 12.0 -- Earn/share -0.23 0.31 -- 12 months
Revenue $280.4 $321.3 -12.7 Income -77.5 -33.1 -- Net/cm -96.8 -33.1 -- Earn/share -2.46 -0.85 -- Figures in millions except for earnings per share.
