Reitmans sales fall in Q3 as plus-size banners disappoint
today Dec 6, 2019
Reitmans announced on Thursday third-quarter results that missed company expectations, primarily due to the disappointing financial performance of its plus-size banners.
The Canadian fashion group, and owner of brands Addition Elle and Thyme Maternity, said sales for the third quarter 2020 dropped to $222.3 million, as compared with $239.7 million reported during the same period last year.
Even e-commerce sales, which continues to see strong growth, were not enough to drive momentum in comparable sales. Instead, comparable sales decreased 2.8 percent, primarily due to store traffic being down 0.7 percent, and customers' overall transaction value being down 5.9 percent for the quarter ended November 2, 2019.
The company reported its net loss was $23.1 million ($0.47 basic and diluted loss per share), as compared with $8.9 million net earnings ($0.14 basic and diluted earnings per share) for the third quarter last year.
Reitmans attributed the earnings loss to lower sales, a decrease in gross profit, and a goodwill impairment expense of $11.8 million, as well as an increase in net finance costs.
Following an unimpressive first and second quarter, net loss year-to-date was $35.8 million ($0.61 basic and diluted loss per share), as compared with $15.7 million net earnings ($0.25 basic and diluted earnings per share).
Strategic brand changes were implemented at the beginning of the fiscal year to reposition the company’s Addition Elle and Penningtons banners, but the changes have failed to resonate with the banners' customer base.
Looking ahead, the company said “corrective measures, including new leadership of the plus-size banners, were implemented late in the third quarter of 2020 to refocus and reposition the Addition Elle and Penningtons banners, and have yet to have an impact on the operating results.”
Reitmans currently operates 587 stores consisting of 260 Reitmans, 112 Penningtons, 79 Addition Elle, 81 RW & CO. and 55 Thyme Maternity.
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