Tops Appliance Sales, Loss Rise In First Quarter
By TWICE staff -- TWICE, 6/7/1999
Tops Appliance City reported slightly higher revenue and an increased loss for the first quarter, and it outlined expansion strategies for its brick-and-mortar and e-commerce operations.
For the quarter, revenues edged up less than 1% to $61.7 million from the year-earlier $61.4 million, but comparable sales decreased 7.7%.
The metro New York chain posted a net loss of $5.4 million, up significantly from last year's $2.5 million, which included an $859,000 gain on debt extinguishment. The results include those of two Manhattan stores opened in the second half of last year and a loss of about $1 million from its Internet retailing operation.
Executive VP Thomas Zambelli said the year-to-year comparison was difficult because of the "exceptionally strong performance in the first quarter of 1998" and this year's "particularly challenging competitive environment."
He added that the performance of Tops' joint venture electronics.net is meeting internal expectations. "We look forward to future enhancements to this selling platform, which should result in continued improving results." The joint venture will also continue to "seek new marketing partners to further drive traffic to the site." Also, he said, Tops will again operate two room air conditioner specialty stores in Manhattan this summer.
CEO Richard Jones said that to improve profitability Tops will "de-emphasize lower-margin products," such as PCs and home office, in favor of "new, higher-margin segments." He also said a new Tops store will open in Brooklyn this month, giving it 10 outlets, and the chain will be expanding its promotional efforts to include direct mailings and increased print and radio ads.
Tops also announced that it has extended its $40 million revolving credit agreement with Congress Financial to October 31, 2001.
Separately, Tops said it has agreed to acquire, for undisclosed terms, The Kitchen Place, a full-service kitchen cabinet designer and retailer that has been operating leased departments in select Tops stores. Those departments generated about $2 million in sales last year.
Tops said it would expand the Kitchen Place departments to more of its outlets. It also announced the addition of bedding and the expansion of houseware offerings in six of its nine outlets.
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