ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, March 30, 1996 TAG: 9604010006
SECTION: BUSINESS PAGE: C-8 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
Best Products Co. Inc., a jewelry and home furnishings retailer, reported a $95.7 million loss for its latest fiscal year, prompting some analysts to question the company's continuing viability.
But the Richmond-based retailer with a store in Roanoke also announced plans to streamline its inventory, close some stores and expand its advertising.
``I don't understand how they could rack up such huge losses,'' said Kenneth M. Gassman Jr., a retail analyst with Davenport & Company of Virginia Inc. in Richmond. ``Can the company survive? It's questionable.''
``We knew the results would be bad, but we didn't know they would be quite that bad,'' said H.B. Thomson III, a retail analyst with Wheat First Butcher Singer Inc. in Richmond.
The loss for its fiscal year ended Feb. 3 equaled $3.03 a share of common stock and was on sales of $1.5 billion. The loss compares to a year-earlier net profit of $23.3 million, or 73 cents per share, on sales of $1.52 billion. The company's stock closed Friday on the Nasdaq Stock Market at $2.371/2 a share, down 1/16 from Thursday's close.
The 1995 loss includes $45.7 million in restructuring charges related in part to closing 10 stores and terminating leases for nine more stores that were scheduled to open during 1996 and 1997. It is uncertain how many employees will be laid off.
Earlier this month, Best announced plans to discontinue its fall catalog, which, after 39 years, was no longer competitive. The company plans to redirect the money once used to produce the catalog - estimated by analysts at $15 million to $20 million - into a television advertising campaign, which will start this year.
The company also will discontinue several unprofitable merchandise categories, including bicycles, home office electronics and some sporting goods, and will add domestic goods such as pillows and pads.
``This will be a year of significant transition for Best Products,'' Stewart M. Kasen, Best's chairman, president and chief executive officer, said in a statement.
The company emerged from Chapter 11 bankruptcy two years ago. Best closed dozens of stores, eliminated some merchandise, developed a new store format and made the shopping process easier to use while under the court's protection. The chain had three years of modest increases in sales at stores open at least a year and posted its first profit in years in 1994.
The company's red ink for the year came largely in its fourth quarter, when the loss was $74.7 million, or $2.37 per share, on sales of $584.7 million, compared to year-earlier net profit of $29.8 million, or 94 cents per share, on sales of $602.4 million.
The Associated Press contributed to this story.
LENGTH: Medium: 55 linesby CNB