Following second-quarter drops in revenue and profit at its retail consumer electronics chain, The Wiz, parent Cablevision Systems said it will close 26 of 43 stores, with only the most profitable surviving.
The Wiz, a New York/New Jersey/Connecticut area retailer, operated as part of Cablevision Systems' Cablevision NY Group, reported a 15.4 percent drop in net revenue for the second quarter, reaching $132.1 million, down from a pro forma $156.2 million in the year-ago period. Cablevision announced both quarterly financials and store closings earlier this month.
Consolidated adjusted operating cash flow at The Wiz, which is operating profit before depreciation and amortization, and excludes the effects of long-termincentive and stock plan income or expense — called AOCF by Cablevision — was posted at an AOCF deficit of $19.8 million for the second quarter. This figure was down 33.4 percent from a pro forma AOCF deficit of $14.8 million in the second quarter of 2001, due to lower revenue and lower gross margin.
"We will not continue to have the kind of losses [at The Wiz] seen in the second quarter," said James Dolan, Cablevision president/CEO. "We expect EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) at breakeven in 2003," he said about the CE chain. "If we can't achieve this, we'll have to go for more [stringent] measures," said Dolan, although he said he was confident current contraction would do the job.
Cablevision also said it would cut 1,100 jobs, or 7 percent of its workforce, in 2003. The cuts will not affect customer-service personnel, though Cablevision said the number of layoffs would rise when it closes The Wiz locations.
For the six months, net revenue at The Wiz decreased 11.5 percent, to $271 million, compared with a pro forma $307.1 million in the same six months last year.
Consolidated adjusted operating cash flow decreased 25.5 percent at The Wiz during the six months, down to an AOCF deficit of $40.4 million, compared with a pro forma AOCF deficit of $32.2 million in the same six months a year ago.