Le Château gets $70mn credit facility from GE capital
Le Château Inc. reported that sales for the fourth quarter ended January 28, 2012 amounted to $82.5 million, a decrease of 5.3% from $87.1 million for the fourth quarter ended January 29, 2011. Comparable store sales decreased 7.2% for the fourth quarter versus the same period a year ago.
Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the fourth quarter amounted to $8.8 million or 10.6% of sales, compared to $11.1 million or 12.7% of sales last year. Net earnings for the fourth quarter amounted to $1.1 million or $0.05 per share (diluted) compared to net earnings of $4.2 million or $0.17 per share the previous year.
Sales for the year ended January 28, 2012 amounted to $302.7 million, a decrease of 5.1% from $319.0 million for the year ended January 29, 2011. Comparable store sales decreased by 7.9% versus the same period a year ago. Sales were negatively impacted throughout 2011 by several factors including: a reduction in store traffic as consumers continued to remain cautious on discretionary spending within a challenging retail environment; the impact of an unseasonably warm winter on demand for winter-wear; and a shift out of the junior casual wear market in order to re-align all of the product categories under one clear, focused lifestyle brand targeting contemporary fashion for today's modern man and woman.
EBITDA for the year amounted to $20.2 million or 6.7% of sales, compared to $47.0 million or 14.7% of sales last year. Net loss for the year ended January 28, 2012 amounted to $2.4 million or $(0.10) per share (diluted) compared to net earnings of $19.6 million or $0.79 per share for the year ended January 29, 2011. Earnings and margins for the year were negatively impacted by increased promotional activity.
The Company incurred some non-recurring expenses related to the temporary ramp-up in marketing expenses to accelerate brand repositioning efforts and start-up costs related to the e-commerce initiative which totaled $5.8 million for the year. The Company also recorded $2.0 million for write-offs and impairment of property and equipment related to store closures and renovations. In fiscal 2013, the Company is planning to close eight stores in Canada and one store in the U.S., the latter being the Broadway store in New York.
During the year, the Company opened six stores, closed one and expanded twelve existing locations, resulting in the addition of 62,000 square feet or 5.1% to the Le Château network, bringing the total floor space at end of period to 1,284,000 square feet.
Effective for the first quarter ended April 30, 2011, the Company began reporting its financial results in accordance with International Financial Reporting Standards (“IFRS”). Previously reported financial results prepared in accordance with Canadian generally accepted accounting principles have been restated to conform to the new standards adopted.