
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, August 23, 1995                   TAG: 9508230043
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: MEGAN SCHNABEL STAFF WRITER
DATELINE:                                 LENGTH: Medium

HANOVER DIRECT REPORTS LOSS

Hanover Direct Inc., a retailer that publishes specialty catalogs and has a distribution center in Roanoke, has reported a loss of $7.5 million, or 8 cents per share, for the quarter ending July 1. This compares with a net income of $2.8 million, or 3 cents per share, in the second quarter of 1994.

The company's second-quarter revenues of $182.8 million were down 12.4 percent from last year's $185.1 million.

For the first six months of 1995, Hanover Direct reported revenues of $359.4 million, down 13.5 percent from last year's $364.3 million. The company reported a net loss of $12.4 million, or 13 cents per share, for the first half of 1995, compared with net income of $6 million, or 6 cents per share, for the first half of 1994.

According to the company's financial statements and spokeswoman Debra Berliner, several one-time expenditures contributed to the first-half losses. The discontinuation of four poorly performing catalogs - Essence, Mature Wisdom, One 212 and Simply Tops - resulted in a $4 million charge in the second quarter. The four catalogs had $9 million in revenues in the second quarter, compared with $13 million in the same period of 1994.

Construction of a 530,000-square-foot distribution center in Roanoke, completed early in 1995, and the subsequent consolidation of four other distribution facilities contributed another $1.7 million to first-half expenses.

Postage rate increases of 14 percent to 18 percent, as well as paper cost increases of up to 50 percent, contributed another $7.6 million to operating costs during the second quarter and a total of $13.2 million during the first six months of 1995.

To begin to compensate for the losses, Hanover Direct has reduced its catalog circulation by 12 percent from last year's numbers and has reduced its work force by 9 percent. Berliner said she could not provide a location-by-location breakdown of job cuts, but said the company is now under a hiring freeze. She would not comment on jobs at the Roanoke distribution center, but said the new facility is "certainly an investment" - and therefore a priority - for Hanover Direct.

by CNB