Home / Knowledge / News / Apparel/Garments / Home décor retailer Gordmans sales up 6.7% in Q2 FY'13
Home décor retailer Gordmans sales up 6.7% in Q2 FY'13
Aug '13
Gordmans Stores, an Omaha-based apparel and home décor retailer, announced results for its second quarter (thirteen weeks) and six month period (twenty-six weeks) ended August 3, 2013. The Company also announced that its Board of Directors has declared a special cash dividend of $3.60 per share.

Second Quarter Highlights

-Net sales increased 6.7% to $136.8 million compared to $128.2 million in the second quarter of fiscal 2012.
-Comparable store sales decreased 2.6%.
-Four new stores were opened in four new markets, including one new state.
-Diluted earnings per share were $0.05, which exceeded guidance of $0.01 - $0.03.

Six Month Highlights

-Net sales increased 2.3% to $268.2 million compared to $262.2 million in the six months ended July 28, 2012.
-Seven new stores were opened in four new and two existing markets, including one new state.
-Diluted earnings per share were $0.22.

"We delivered comparable store sales that were consistent with expectations despite some continued headwinds and represented a meaningful improvement from the trend we experienced in the first quarter of 2013. At the same time, our bottom line results were ahead of our guidance even as we had to increase our markdown cadence to clear seasonal product and better align inventory levels heading into the second half of the year," commented Jeff Gordman, President and Chief Executive Officer. "We believe that the adjustments we've made, and continue to make, to our merchandise assortments, combined with the rollout of our loyalty program, have positioned us to deliver further improvements over the remainder of fiscal 2013. In addition, we will open three stores next month for a total of 10 new stores this year, at which point we will have 93 locations in 19 states."

The Company's Board of Directors has declared a special cash dividend of $3.60 per share of common stock, payable on September 23, 2013 to shareholders of record on September 9, 2013. The Company will fund the $70 million special dividend through available cash balances and a new $45 million senior term loan with Cerberus Business Finance, LLC.

The loan matures in 2018 and bears interest at Prime plus 5.25% with a Prime floor of 3.25%, or LIBOR plus 7.00% with a LIBOR floor of 1.50%, as selected by the Company. The term loan also contains an early payment provision, exercisable at the Company's option, pursuant to which the Company may repay all or a portion of the outstanding principal amount, subject to a small prepayment penalty.

In addition, the Company entered into an amended credit facility with Wells Fargo Bank, as lead agent, which increased the line of credit to $80 million from $60 million, lowered the interest rate by 0.25%, lowered the unused line fee from 0.375% to 0.25% and extended the maturity date by 3 years to 2018.

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