There may be hope here. A new CEO, a new credit line and same store sales up during the fourth quarter:
Restoration Hardware 4th qtr net rises, names new CEO
CORTE MADERA, Calif., March 21 (Reuters) - Restoration Hardware <RSTO.O> on Wednesday reported higher fourth-quarter earnings but warned of lower sales in the current quarter, and named a former president of rival home goods retailer Williams-Sonoma Inc. <WSM.N> as its new chief executive.
The Corte Madera, Calif.-based retailer reported net income of $9.7 million, or 56 cents per diluted share, for its fourth quarter ended Feb. 3, more than double the net income of $3.9 million, or 23 cents, posted for the same period a year ago.
"Earnings for the fourth quarter were significantly better than anticipated, and helped Restoration Hardware post a modest operating profit for the full year versus an operating loss in 1999," Restoration's Chairman Stephen Gordon said in a statement.
The company said Gordon, who founded Restoration Hardware, is being succeeded as chief executive by Gary Friedman, who resigned as president of Williams-Sonoma on March 15.
Shares of Restoration Hardware surged almost 21 percent on Wednesday to close at $2.19 on the Nasdaq stock market.
"The strong quarterly performance was driven by solid execution of the strategies we outlined last year, namely to better manage inventory through our bi-coastal distribution system and to increase average transaction value through a more compelling offering with higher price points," Gordon said.
At the same time, Corte Madera, Calif.-based Restoration Hardware said it is feeling the "impact of the current economic softness," and that February and March same-store sales will drop by double-digits.
"Like most retailers, we are feeling the impact of the current economic softness," Gordon said. "We are enthused with our spring assortment, which debuts this week, and are also optimistic about our ability to drive traffic through expanded catalog mailings into the retail trade area."
He said the company is currently looking for comparable store sales to fall 15 percent to 18 percent for the quarter.
Restoration also said it has negotiated an amended credit facility with its banking group and has signed an agreement with an investor group led by Palladin Capital Group and Reservoir Capital for a $15 million private placement of convertible preferred stock, which it says will help the company's financial flexibility.
The company said its sales for the quarter rose to $146.6 million from $118.0 million in the year-ago period, while same-store sales rose 5.7 percent. It also added 13 new stores during fiscal 2000. At the end of the period, 93 stores were included in the comparable store sales base vs. 62 stores at the end of the same year-ago period.
During the fourth quarter, the Restoration opened one store in West Palm Beach, Fla. As of Feb. 3, the company operated 106 retail stores in 31 states, the District of Columbia and in Canada.
20:45 03-21-01 |
