The Company opened two store locations during the first quarter of fiscal 2010, ending the period with 111 stores.
Direct Segment Results Total revenue for the direct segment for the first quarter of fiscal 2010 decreased 10.7% to $24.0 million from $26.9 million in the prior year period. Gross margin for the direct segment was 44.1% compared to 41.8% in the first quarter of the prior year due to an increase in merchandise margin primarily resulting from reduced clearance sales compared to the prior year period.
SG&A expenses for the direct segment, which include a severance charge of $0.7 million, were $11.8 million, or 49.3% of sales, compared to $11.6 million, or 43.3% of sales, in the prior year period. The increase in SG&A as a percentage of sales reflects the deleveraging of selling and overhead expenses. The operating loss for the first quarter of fiscal 2010 for the direct segment, excluding the aforementioned severance charge, was $0.4 million compared to $0.4 million in the prior year period.
Mr. Killough continued, "I am very pleased to be taking on a new role as CEO of dELiA*s Inc. and look forward to the opportunities ahead of us. We are taking steps to improve the business and our performance as we continue to limit our capital expenditures and prudently reduce costs. We continue to focus on improving productivity in our existing operations. We expect the initiatives we are implementing across both our retail and direct segments will result in improved performance in the back half of the year and provide for a stronger business model long-term."
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