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Garment retailer Reitmans reports dip in revenues
02
Dec '11
Reitmans (Canada) Limited announces its results for the nine months ended October 29, 2011.

Sales for the nine months ended October 29, 2011 decreased 3.9% to $759,443,000 as compared with $790,286,000 for the nine months ended October 30, 2010. Same store sales1 decreased 5.2%. Sales for the nine months ended October 29, 2011 as compared to the nine months ended October 30, 2010 were impacted by weaker customer traffic as consumers were faced with higher personal debt levels, high commodity costs and concern over economic conditions.

The Company's gross margin decreased from 67.7% to 65.7% for the nine months ended October 29, 2011. While the strength of the Canadian dollar in the nine months ended October 29, 2011 was favourable to the gross margin, this improvement was offset by a more promotional environment which negatively impacted gross margin. The average rate for a US dollar in the first nine months of fiscal 2012 was $0.98 Canadian as compared to $1.03 Canadian in the first nine months of fiscal 2011.

EBITDA1 for the nine months ended October 29, 2011 decreased 29.7% to $104,767,000 as compared with $148,975,000 last year. Net earnings decreased 43.0% to $42,865,000 or $0.65 diluted earnings per share as compared with $75,168,000 or $1.11 diluted earnings per share last year.

Sales for the third quarter ended October 29, 2011 decreased 3.2% to $254,072,000 as compared with $262,515,000 for the third quarter ended October 30, 2010. Same store sales decreased by 5.8%. The Company's gross margin decreased from 66.2% to 65.8% for the third quarter ended October 29, 2011. While the strength of the Canadian dollar in the third quarter ended October 29, 2011 was favourable to the gross margin, this improvement was offset by a more promotional environment which negatively impacted gross margin.

The average rate for a US dollar in the third quarter ended October 29, 2011 was $1.00 Canadian as compared to $1.03 Canadian in the third quarter ended October 30, 2010. EBITDA for the third quarter ended October 29, 2011 decreased by $11,566,000 or 26.6% to $31,845,000 as compared with $43,411,000 last year. Net earnings decreased 49.0% to $10,561,000 or $0.16 diluted earnings per share as compared to $20,692,000 or $0.31 diluted earnings per share for the same period last year.

On October 19, 2011 the Company announced its plan to close its 25 Cassis stores, primarily through conversion to other Company banners. In the third quarter ended October 29, 2011 the Company has recorded costs associated with store conversions and closures, primarily related to fixed asset impairment losses and employee severance costs, of $5,100,000 ($3,700,000 after tax).

During the third quarter, the Company opened 14 new stores, comprised of 5 Reitmans, 1 Smart Set, 1 RW & CO., 3 Thyme Maternity, 1 Cassis, 1 Penningtons and 2 Addition Elle. Four stores were closed, comprised of 2 Reitmans and 2 Penningtons. At October 29, 2011, there were 975 stores in operation, consisting of 366 Reitmans, 158 Smart Set, 68 RW & CO., 77 Thyme Maternity, 25 Cassis, 158 Penningtons and 123 Addition Elle, as compared with a total of 979 stores as at October 30, 2010.

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