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Reitmans sales marginally down 1.9% in FY'13
09
Apr '13
The fiscal year ended February 2, 2013 ("fiscal 2013") includes 53 weeks instead of the normal 52 weeks. The inclusion of an extra week occurs every fifth or sixth fiscal year due to the Company's floating year-end.

Sales for fiscal 2013 decreased 1.9% to $1,000,513,000 as compared with $1,019,397,000 for the year ended January 28, 2012 ("fiscal 2012"). This decrease in sales is due primarily to a net reduction of 31 stores in fiscal 2013 and a same stores sales1 decrease of 2.0% partially offset by an additional week of sales. 

The Company experienced lower store traffic in a challenging retail environment and was impacted by a disruption in the planned flow of inventory to stores as described below.  The Company's gross margin for fiscal 2013 decreased to 62.8% from 64.4% for fiscal 2012. 

Net earnings for fiscal 2013 decreased 44.0% to $26,619,000 ($0.41 diluted earnings per share) as compared with $47,539,000 ($0.72 diluted earnings per share) for fiscal 2012.  For fiscal 2013, adjusted EBITDA1 decreased by $35,837,000 or 28.3% to $90,951,000 as compared with $126,788,000 for fiscal 2012.

Sales for the fourth quarter of fiscal 2013 increased 3.0% to $267,659,000 as compared with $259,954,000 for the fourth quarter of fiscal 2012.  This increase in sales is due to an additional week of sales partially offset by a reduction in the number of stores and a same store sales1 decrease of 1.5%.  The fourth quarter sales of fiscal 2013 were impacted by a difficult retail environment.

The Company's gross margin for the fourth quarter of fiscal 2013 decreased to 59.2% from 60.4% for the fourth quarter of fiscal 2012.  The Company recorded a net loss for the fourth quarter of fiscal 2013 of $1,080,000 ($0.01 diluted loss per share) as compared with a profit of $4,674,000 ($0.07 diluted earnings per share) for the fourth quarter of fiscal 2012.

This loss reflects operational losses of approximately $1,200,000, including start-up expenses, directly relating to the new Thyme Maternity boutiques initiative in the Babies"R"Us stores in the United States. Adjusted EBITDA1 decreased by $8,881,000 or 40.3% to $13,140,000 as compared with $22,021,000 for the fourth quarter of fiscal 2012.

Management is disappointed with the results for fiscal 2013 and has taken action in the merchandising and marketing efforts of each of its banners to improve sales and profitability.  Additionally, the Company has undertaken an initiative to improve efficiencies and reduce overhead across head office and field activities.

During the year, the Company opened 54 new stores and closed 85.  Accordingly, at February 2, 2013, there were 911 stores in operation, consisting of 361 Reitmans, 146 Smart Set, 73 RW & CO., 72 Thyme Maternity, 153 Penningtons, and 106 Addition Elle, as compared with a total of 942 stores as at January 28, 2012. In addition, there were 20 Thyme Maternity boutiques ("shop-in-shop") in select Babies"R"Us locations in Canada and 154 boutiques in Babies"R"Us stores in the United States.

Reitmans


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