Trans World Entertainment Seeks Reverse Stock Split to Avoid Delisting

Fiscally-challenged Trans World Entertainment Corp., parent to home entertainment retail chain f.y.e. (For Your Entertainment) and e-commerce facilitator Etailz.com, is seeking shareholder approval for a reverse-stock split at the upcoming June 27 annual meeting.

In a filing, TWEC said it is looking to authorize a 1-for-20 shares reverse split to bring its stock in compliance with Nasdaq’s $1-per-share minimum valuation.

The Albany, N.Y.-based company’s stock, which closed May 13 at 35 cents per share, would be valued at $7-per-share following the split.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

If approved by shareholders, TWEC outstanding shares of common stock would decrease to more than 1.8 million shares from 36.2 million shares.

TWEC operates more than 200 mall-based f.y.e. locations, down from 540 stores in 2010.

The chain saw store revenue drop 15% to $78.8 million from $92.4 million in the previous-year period. Operating loss narrowed to $1 million from a $2.4 million during the previous-year period.

Store revenue declined 14% to $231.2 million from $268.3 million during the previous-year period.

To offset ongoing declines in packaged media sales, including DVD/Blu-ray Disc movies and music CDs, f.y.e has pushed trend items such as collectibles, action figures, posters, T-shirts and related merchandise.

Meanwhile, Spokane, Wash.-based e-commerce middleman Etailz.com, which Trans World acquired in 2016 for $75 million, reported a $62 million loss from operations.

F.Y.E. Parent Delays 10K Fiscal Report Filing, Cites Business Operation Concerns

The corporate parent of home entertainment retailer f.y.e. (For Your Entertainment) May 6 disclosed it has sought a delay in its 10K fiscal-year filing (ended Feb. 2) with the Securities and Exchange Commission (SEC).

In the filing, Trans World Entertainment Corp. said the delay from May 3 to May 20 was due in part to apprehensions by its accounting firm (KMPG) about the company’s ability to “continue as a going concern.”

The company ended the fiscal period with just $4.3 million in cash – down from more than $31 million a year ago.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The company’s shares, which closed at 34 cents per share, are on notice of being delisted by Nasdaq for failing to meet the trading board’s $1-per-share minimum threshold.

New York-based TWEC operates more than 200 mall-based f.y.e. home entertainment retail stores – down from 540 stores in 2010.

The chain saw store revenue drop 15% to $78.8 million from $92.4 million in the previous-year period. Operating losses narrowed to $1 million from a $2.4 million during the previous-year period.

Store revenue declined 14% to $231.2 million from $268.3 million during the previous-year period.

To offset ongoing declines in packaged media sales, including DVD/Blu-ray Disc movies and music CDs, f.y.e has pushed trend items such as collectibles, action figures, posters, T-shirts and related merchandise.

Meanwhile, Spokane, Wash.-based e-commerce middleman Etailz.com, which Trans World acquired in 2016 for $75 million, reported a $62 million loss from operations.

 

Trans World Entertainment Corp. Given Nasdaq Delisting Warning

Trans World Entertainment Corp., parent of home entertainment retailer f.y.e. (For Your Entertainment), Jan. 17 disclosed it has been put on notice by Nasdaq regarding its stock not meeting the $1 minimum price-per-share valuation for publicly-traded companies.

The retailer, whose stock is trading at 61 cents per share, has until July 15 to elevate the stock price to the minimum amount.

If the company does not regain compliance during the initial period, it may be eligible for additional time to regain compliance. If TWEC is not eligible, its expects that Nasdaq will provide written notice that the company’s common stock will be subject to delisting.

Trans World Entertainment Widens Q3 Loss

Store-based home entertainment retail took another blow to the economic bottom line.

Trans World Entertainment Corp., parent of mall-based packaged media retailer f.y.e. (For Your Entertainment), Dec. 12 reported third-quarter (ended Nov. 3) net loss of $14 million – up 75% from a net loss of $8 million during the previous-year period. Revenue dipped slightly to $90.8 million from $91.8 million last year.

Albany, N.Y.-based Trans World Entertainment attributed the increased loss on the sluggish environment for mall-based retail, in addition to ongoing consumer shifts away from packaged media.

“For the f.y.e. segment, the steps we’ve taken, including changes in our merchandise assortment and presentation, to counter declining mall traffic and the ongoing declines in physical media are beginning to generate a positive response from our customers as we delivered a comparable store sales increase of 3.8% for the quarter,” CEOMike Feurersaid in a statement.

The increase was driven by sales in lifestyle (up 13.3% from the previous-year period) and electronics (up 3%). The segments represented 53% of store revenue compared to 48% last year.

Video and music comp sales declined 4% and 0.03%, respectively, with video decline offset by increases in horror movie DVD and Blu-ray Disc sales.

It was a pyrrhic victory as operating losses at f.y.e. increased nearly 21% to $9.5 million from $7.8 million last year. Revenue dropped about 8% to $47.8 million compared to $52.1 million. The company operated 227 stores in the quarter compared to 268 stores in the previous-year period.

Meanwhile, attempts to transform corporate revenue from brick-and-mortar entertainment to ecommerce remain challenged.

Trans World Entertainment acquired Etailz.com in 2016 to help it transition into ecommerce. The Spokane, Wash.-based subsidiary helps third-party businesses navigate online selling through channels such as Amazon, Walmart.com and eBay.

Etailz generated 48% of Trans World Entertainment’s Q3 revenue, up from 44% last year. It also increased segment operating losses exponentially to $4.2 million from $253,000 last year. Revenue increased 8% to $44.1 million from $40.8 million. Primary cost driver included sales, general and administrative costs that totaled $11.4 million, up 37% from $8.3 million.

Regardless, Feurer remains upbeat heading into the winter retail period — despite Wall Street’s growing lack of confidence. The company’s stock is trading below Nasdaq’s $1 minimum and in danger of being delisted.

“Although meaningful headwinds will continue, we have made real progress in our efforts to differentiate our position in this challenging retail environment,” he said.

 

 

Trans World Entertainment Promotes Edwin Sapienza to CFO

Trans World Entertainment Corp., parent of the F.Y.E. home entertainment retail chain, disclosed in an Oct. 29 regulatory filing the promotion of veteran executive Edwin Sapienza to the vacant CFO position following Oct. 10 passing of John Anderson.

Sapienza, 48, has been secretary and treasurer at TWEC since 2012 – positions he will continue going forward. He joined TWEC as a staff accountant in 1993.

In addition to a base salary of $280,000, Sapienza received stock options to purchase 50,000 shares of common stock, in addition to 20,000 shares of restricted stock.

Trans World Entertainment Stock Given Delisting Warning

Trans World Entertainment Corp. Oct. 12 disclosed it has received formal notice from Nasdaq that its stock has traded below the $1-per-share minimum for the past 30 business days.

The Albany, N.Y.-based distributor, which operates the f.y.e. (For Your Entertainment) home entertainment retail chain, in addition to Etailz.com and related websites, has until April 8, 2019 to bring the stock price in compliance with Nasdaq rules or it will be subjected to delisting.

TWEC reported a loss of $8.1 million in the most recent fiscal period, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.

Mall-based f.y.e. revenue dropped nearly 17% to $54 million from $65 million during the previous period.

 

 

Trans World Entertainment Ups Q1 Loss

Trans World Entertainment Corp. May 29 reported a first-quarter (ended May 5) loss of $8.1 million, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.

The company cited much of the loss on continued challenges in its f.y.e. (For Your Entertainment) mall-based home entertainment retail chain.

Revenue at one of the country’s last entertainment retail chains dropped nearly 17% to $54 million from $65 million during the previous period.

Comparable f.y.e. store sales declined 8.5%, as a comp increase of 2.8% in lifestyle and electronics categories was offset by a 16.8% decline in video, music and video games.  The lifestyle and electronics categories represented 49.5% of revenue for the first quarter as compared to 42.6% in the same period last year.

The chain recorded an operating loss of $5.4 million, compared to an operating loss of $4.4 million for same period last year.

f.y.e. operated 253 stores – mostly mall-based – in the period compared to 273 stores last year. With malls under siege from e-commerce, f.y.e. faces a duel threat from changing consumer consumption of video entertainment and shopping habits.

“Although in the midst of continued structural and external challenges [at f.y.e.], we are focused on efforts to differentiate our entertainment merchandise towards creating a unique specialty retailing experience of choice for families and fans of popular culture and fun,” CEO Mike Feurer said in a statement.

Indeed, Feurer preferred to highlight the company’s overall fiscal health, in addition to etailz.com, the company’s ecommerce subsidiary selling merchandise on Amazon. Revenue increased 15% to $42.5 million, while operating loss increased to $2.8 million from $821,000 last year.

“As we work through the assortment changes needed to stabilize the f.y.e. business, we have maintained focus on the balance sheet, ending the quarter with $15 million and no debt,” Feurer said.

 

 

 

F.Y.E. Holiday Sales Slump 12%

The For Your Entertainment (f.y.e.) retail chain Jan. 4 reported a 12% decrease in winter holiday sales to $72 million for the nine-week period through Dec. 31, 2017, compared to $81.8 million in the previous-year period.

One of the last (primarily mall-based) entertainment retail chains in operation, f.y.e. saw segment revenue drop 21% when factoring in 7% decline in operating stores.

Corporate parent Trans World Entertainment Corp. said f.y.e. sales were further impacted by an underperforming box office, lower mall foot traffic, in addition to declining market demand for packaged media, among other factors.

“This negatively impacted our lifestyle categories as well,” CEO Mike Feurer said in a statement.

The CEO said f.y.e remains in the midst of “continued structural challenges” while redoubling efforts to differentiate entertainment merchandise and consumer experience.

“[We remain] focused on rightsizing our expenses and inventory levels,” he said.

Meanwhile, ecommerce subsidiary etailz.com, while sells merchandise largely through Amazon, saw revenue increase 42% to $36 million from $25.3 million last year.

Consolidated sales decreased 7% to $108 million, compared to $116.1 million last year.

For the 11 months in the fiscal year, consolidated sales increased 26% to $406 million from $322 million. F.Y.E. sales declined 15% to $248 million from $291.7 million. Etailz.com revenue topped $158 million.