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Wet Seal reports same-store sales up 29.8% for Q1
28 May '05
7 min read
the decrease in store operating expenses over last year was centered in the wet seal division and primarily due to the closing of 153 low volume wet seal stores, the discontinuance of its in-store fashion and entertainment network, seal tv, and changes in its store staffing model.
in addition, sales volume leverage on operating costs also contributed to the operating expense ratio improvement. general and administrative expenses increased approximately $0.7 million over last year to $8.8 million. as a percent to sales, general and administrative expenses were 8.5%, or 40 basis points higher than a year ago.
the company previously announced it would close approximately 150 wet seal stores as part of management's effort to return the company to profitability. the company closed 153 stores and completed the store closings previously announced on march 5, 2005.
for the 13-week period ending april 30, 2005, the company recognized $5.2 million in store closure costs associated with the closure of 50 wet seal stores during the quarter. the store closure costs consisted of $4.9 million for estimated lease termination costs.
the company had net interest expense of approximately $1.8 million for the first quarter ended april 30, 2005 versus approximately $0.2 million of interest income a year ago. interest expense increased significantly as a result of the placement of an $8.0 million term loan in september 2004, a $10.0 million bridge loa$0.2 million of interest income a year ago. interest expense increased significantly as a result of the placement of an $8.0 million term loan in september 2004, a $10.0 million bridge loan in november 2004, $56.0 million of convertible notes issued january 14, 2005 and amortization of financing costs associated with the debt placements.
in addition, sales volume leverage on operating costs also contributed to the operating expense ratio improvement. general and administrative expenses increased approximately $0.7 million over last year to $8.8 million. as a percent to sales, general and administrative expenses were 8.5%, or 40 basis points higher than a year ago.
the company previously announced it would close approximately 150 wet seal stores as part of management's effort to return the company to profitability. the company closed 153 stores and completed the store closings previously announced on march 5, 2005.
for the 13-week period ending april 30, 2005, the company recognized $5.2 million in store closure costs associated with the closure of 50 wet seal stores during the quarter. the store closure costs consisted of $4.9 million for estimated lease termination costs.
the company had net interest expense of approximately $1.8 million for the first quarter ended april 30, 2005 versus approximately $0.2 million of interest income a year ago. interest expense increased significantly as a result of the placement of an $8.0 million term loan in september 2004, a $10.0 million bridge loa$0.2 million of interest income a year ago. interest expense increased significantly as a result of the placement of an $8.0 million term loan in september 2004, a $10.0 million bridge loan in november 2004, $56.0 million of convertible notes issued january 14, 2005 and amortization of financing costs associated with the debt placements.
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