Service Merchandise's Sales Improve
.c The Associated Press
BRENTWOOD, Tenn. (AP) - Service Merchandise Co. reported better-than-expected holiday sales that may give the retailer some breathing room while it works through bankruptcy reorganization.
``This company's not dead. We're alive,' said Sam Cusano, chief executive officer of the chain of more than 220 jewelry, gift and home-decorations stores.
Preliminary financial information showed the company's December sales exceeded $500 million and its gross profit margin exceeded forecasts from its business plan by more than $5 million.
Service Merchandise said Thursday it will substantially exceed its operating earnings target of $35 million for the nine months ended Dec. 31. That's at least $7 million better than the same period from a year earlier.
The company did not release complete financial results for the holiday sales period.
Operating earnings, or earnings before certain expenses, serve as a barometer of core business performance and are often cited by restructuring companies.
The company also said it filed a motion in U.S. Bankruptcy Court to extend its Chapter 11 plan through April 30, 2001.
The company said it hopes to emerge from bankruptcy in 2001.
``From the outset of our reorganization cases, the company's goal has been to first stabilize Service Merchandise's business operations - including marketing, merchandising, store operations, E-commerce and other distribution channels - in 1999 and then formulate a 2000 business plan which, if successful, should be the basis for the company's successful emergence from Chapter 11 in 2001,' Cusano said.
``Stabilization of the business is only the first step of a reorganization. However, we recognize that many challenges lie ahead before Service Merchandise can return to long-term growth and profitability.'
The New York Stock Exchange suspended trading of Service Merchandise stock on Dec. 3 and asked the Securities and Exchange Commission to approve delisting of the company's common stock.
The NYSE said the company was not meeting criteria for total stockholders' equity and market capitalization, two measures of a company's value. |
