BARRY’S NAMES THREE, PLANS SUPERSTORES
Barry’s Jewelers, the nation’s fourth largest jeweler, formally installed a new top management team in April. It was one of several important announcements in April by or about the Modesto, Cal.-based firm, which has 161 stores in 17 states. It also:
Announced a drop in third-quarter sales and profits.
Said it plans to double its number of superstores (the first opened in mid-1995).
Became the first national jeweler to announce a Web site. (See story on page 18 of this issue.)
Top team: Barry’s board of directors named Robert W. Bridel, former president of Gordon Jewelry and Barry’s vice president of operations since 1991, as president. Terry Burman, the previous president, left last September to become chairman and CEO of Sterling Inc.
Tom S. Liston, Barry’s senior financial officer since 1991, becomes vice chairman and chief financial officer. Cleaveland D. Miller, who joined the board in 1992, is now chairman. The board also expanded from six members to eight.
Miller said the board did consider outside candidates, but the promotions of Bridel and Liston “reflect the exceptional contributions they have made…as the architects of Barry’s turnaround [since the early 1990s] and our confidence in their ability to lead Barry’s into a prosperous future.” Liston recently negotiated a AAA-rated, $100 million debt recapitalization and credit expansion that provide funds for Barry’s continued growth.
Sales & profits: Barry’s results for the third quarter and nine months (ended Feb. 29) trailed the previous year’s.
For the quarter, net sales of $50.9 million were slightly below 1995’s. Net income of $3.2 million was down 11.8% from ’95. Comparable store sales rose 3%. Sales of $110.7 million for the nine months were up 4%, while net income of $1.7 million was down 19%. Same store sales rose 2%.
“Like other retailers,” says Liston, “Barry’s encountered lower consumer demand during a portion of the quarter that caused us to fall short of our projected sales target.” The “high quality inventory” it bought anticipating stronger consumer demand went unsold, “significantly elevating the interest expense for the quarter” and impacting Barry’s bottom line. “Due to the quality of that merchandise,” he adds, “we foresee no difficulty in absorbing it over the next two quarters.”
Superstores: In mid-1995, Barry’s added superstores with more space and more inventory in depth to its mix. By April, it had converted 15 of its most profitable outlets to the new format.
The concept has been “very good for Barry’s,” says Liston. The debt refinancing and credit line expansion will give it “the means to expand this winning concept by converting more of our top-performing stores.” Barry’s plans to add 16 more superstores by Christmas, which should “strengthen our competitive position in this critical sales period,” Liston says.
It also plans to open 15 regular stores by year’s end. In the process, it will add two states (Pennsylvania and Michigan) to its market.
FRIEDMAN’S INCOME UP 115% IN 2ND QUARTER
Friedman’s Inc., the third largest jewelry chain store operator in the U.S., reported substantial gains for the second quarter and half ended March 31.
Total revenues for the quarter rose 43% to $33.7 million, while net income rose 115% to $1.7 million. Net merchandise sales were $28 million, up 42% from 1995’s second quarter. Comparable store sales inched up 3.7%, while the profit margin reached 5%, up from 3.3% last year. Earnings were 14 cents per share on 12,245,000 weighted average shares outstanding, up from 8 cents on 9,637,000 shares in 1995.
Increases in net income and net profit margin came largely from “increased revenues and lower interest expense, partially offset by a higher income tax rate,” says a company report. In addition, the firm opened 23 stores (20 in power strips, two in malls and one in a power center) during the second quarter.
For the half year, total revenues were $109.9 million, up 47%, while net sales of $98.5 million were up 46%. Net income of $11.7 million was up 53% from 1995. Half-year earnings were 96 cents, up from 80 cents in 1995.
Bradley J. Stinn, chairman and CEO of Friedman’s, says that “revenues advanced satisfactorily” despite a slow start in January and early February when bad weather closed a number of stores. Stinn says the company plans to have 290 to 310 stores by year’s end. The Savannah, Ga.-based firm had 258 stores in 15 states as of April 24.
ZALE SALES RISE 15% IN THIRD QUARTER
Zale Corp., the nation’s largest fine jewelry retailer, boosted net sales 15.6% to $222.2 million in the third quarter ended April 30. The Irving, Tex.-based company increased same store sales 13.9%
The results reflect “strong sales gains in all four of our operating divisions [Zales Jewelers, Gordon’s Jewelers, Guild and Diamond Park leased departments],” says Robert DiNicola, chairman and CEO of Zale.
“A very successful Valentine’s Day promotion got the quarter off to a good start,” he notes, “and subsequent sales were driven by improved merchandise assortments and strong execution at the store level.”
Zale operates nearly 1,200 stores and leased jewelry departments in the U.S., Guam and Puerto Rico.
Friedman’s Jewelers has opened a new store in the Mall of Memphis in Memphis, Tenn. The chain currently operates more than 350 stores.
The Chicago-based regional jeweler Rogers & Hollands opened its 48th store in April in the Bay Park Square Mall, Green Bay, Wis. The chain’s other stores are located throughout Wisconsin, Michigan, Indiana and Illinois.