Bon-Ton Feels Effect of Economy
Women’s specialty apparel retailer The Bon-Ton Stores, Inc. cited the difficult economic environment and waning consumer confidence in releasing generally negative financial results for Q4 and fiscal 2008. Specific details from Bon-Ton’s quarterly and annual results can be found below.
Q4 2008
- Net loss was $87.7 million, compared to net income of $75.2 million in Q4 2007.
- Total sales were $1.03 billion, a 9.4% drop from total sales of $1.13 billion in Q4 2007.
- Comparable store sales decreased 9.7%.
- Gross margin was 34.7% of net sales, a 2.5% reduction from 37.5% in Q4 2007.
Bon-Ton said the reduction in quarterly gross margin reflected increased promotional activities and net markdowns.
Fiscal 2008
- Net loss was $169.9 million, compared to net income of $11.6 million in fiscal 2007.
- Total sales were $3.1 billion, a 7% drop from total sales of $3.36 billion in fiscal 2007.
- Comparable store sales declined 7.4%.
- Gross margin was 35% of net sales, a 1.1% reduction from 36.1% in fiscal 2007.
Bon-Ton cited net markdowns as a primary cause of the annual gross margin decline.
Fiscal 2009 Outlook
- Comparable store sales decrease in the range of 6.5% to 9%.
- Gross margin rate of 35.5% to 36%.
Bon-Ton joins a growing list of women’s specialty retailers who reported downward financial trends in their Q4 and fiscal year 2008 SEC filings. Ann Taylor, Coldwater Creek, Chico’s, Claire’s Stores, and Limited Brands have all reported varying quarterly and annual losses in sales, revenues, and profit margins.
In an exception to the recent trend, fashion footwear retailer Steve Madden reported increased net sales for Q4 and fiscal 2008, although it predicts a drop in sales for fiscal 2009.
The Bon-Ton Stores, Inc. operates 280 department stores, which includes twelve furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers nameplates and, under the Parisian nameplate, stores in the Detroit, MI area.