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Sales fall at Dallas-based specialty apparel store

29
Aug '07

Harold's Stores Inc a chain of upscale ladies' and men's specialty apparel stores, announced operating results for the second quarter and year-to-date period ended August 4, 2007.

For the second quarter, the Company reported a net loss of $4.8 million, or $0.77 per share, compared with a net loss of $5.0 million, or $0.81 per share, in the comparable period of the previous year.

During the year-to-date period ended August 4, 2007, the net loss was $5.3 million, or $0.85 per share, as compared with a net loss of $6.0 million, or $1.02 per share, in the comparable period of the prior year.

"While our second quarter loss showed some improvement versus last year, it was less than anticipated due to sales being well below expectations, which resulted in incremental markdowns during the quarter on spring and summer merchandise," said Ron Staffieri, Chief Executive Officer.

"We believe that sales were impacted by several factors, includinglower inventory levels, principally in sale and clearance merchandise, reduced spending on marketing to our core customers and the unseasonably cool and rainy weather in the Company's core markets of Texas and Oklahoma that had a negative impact on summer merchandise sales."

Mr. Staffieri continued, "In light of the most recent trends and current retail environment, earlier this month the Company implemented a corporate restructuring that will achieve significant annualized expense savings."

"Additionally, the Company's principal investors, RonHow, LLC, an entity controlled by Ronald de Waal and W. Howard Lester, agreed to provide the Company with $3.8 million of additional working capital through the existing subordinated loan debt facility. $2 million of this funding was received on August 23, 2007, and the remainder is expected to be received within the next 30 days."

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