Trans World Entertainment Changing Name to Kaspien Holdings

Trans World Entertainment, former corporate owner of the last standalone home entertainment retail chain, f.y.e., is formally changing its name to Kaspien Holdings. The new name and Wall Street ticker (KSPN) become effective Sept. 8.

Trans World Entertainment in January sold the f.y.e. music, video and collectibles retail business for $10 million in cash to a subsidiary of Sunrise Records and Entertainment Ltd. in Canada. Sunrise also owns music retailer chain HMV in Canada and London.

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The company now owns and runs the former eTailz.com, a Spokane, Wash.-based e-commerce platform. As a result, renamed Kaspien will now market software and services for third-party brands to grow online distribution channels on Amazon, Walmart and eBay, among others.

The restructuring, which includes a new CEO and board of directors, has its work cut out for it going forward. The eTailz.com segment narrowed its fiscal-year loss (ended May 4) to $6.4 million from $72.3 million in the previous-year period. But revenue declined almost 30% to $133.2 million, from $186.9 million a year ago.

FYE Retail Stores Lost $50.7 Million in Fiscal Year

Home entertainment retail chain For Your Entertainment posted a loss of $50.7 million for the fiscal year ended Feb. 1 — more than double the $24.4 million loss during the previous-year period, according to 10K filing by former corporate parent Trans World Entertainment Corp. The chain generated $193 million in revenue compared with $231 million in the previous year.

The company attributed the 16.5% net sales decline from the prior year due to a 13.8% decline in average stores in operation and a 4.7% decline in comparable store net sales.

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Trans World sold FYE and its 200 store leases in February to U.K.-based Sunrise Records and Entertainment for $10 million in cash.

Sales of DVD/Blu-ray Disc movies dropped 26.4% to $45.9 million, from $62.4 million in 2018. Total net sales for the video category declined 17.8% on a comparable store sales basis. Video sales were negatively impacted by industrywide declines in physical video due to digital retail options, including transactional VOD.

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Music sales fell 20.5% to $31.6 million, from $39.7 million. Consumer electronics declined 15.9% to $25.2 million, from $30 million. Trend, which includes collectibles, action figures, posters and T-shirts, saw revenue drop 8.5% to $85.9 million, from $93.8 million.

Trans World Entertainment CEO, Board Out as Company Switches Focus to E-commerce

Trans World Entertainment Corp. March 31 announced the departure of CEO Mike Feurer and four other board members as the former parent to home entertainment retail chain f.y.e. (For Your Entertainment) switches focus to e-commerce facilitator eTailz.com. Feurer had been CEO and a director of the board since 2014.

Departing board members include chairman Michael Solow, Jeff Hastings (former head of DVD sales at Paramount), Rob Marks and Michael Nahl.

“Mike’s leadership was instrumental in the brand transformation and recent sale of our f.y.e. business and the financing of etailz,” Solow said in a statement. “In fact, it was Mike’s foresight regarding digital marketplace retailing that prompted the [TWEC] to reinvent itself with the purchase of etailz several years ago. The board thanks Mike for his contributions to the company and wish him the best in the future.”

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Mike Feurer

New York-based TWEC sold f.y.e. in January for $10 million, which included Second Spin used packaged-media stores. It acquired Spokane, Wash.-based etailz.com in 2016 for $75 million.

The latter bills itself as an online marketplace retail expert and software provider using proprietary data to help third-party digital marketplace retailing through Amazon, Jet, Walmart.com and eBay.

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Etailz.com has struggled since the acquisition. In the most-recent fiscal period, etailz lost $1.3 million on revenue of $28.6 million, which was down 35% from revenue of $44.2 million during the previous-year period. Through three fiscal quarters, revenue is down almost 30% at $98 million from $138 million. Operating loss has narrowed to $3.6 million from $9.8 million.

Regardless, TWEC secured an additional $30 million in financing for etailz from investors led by Alimco Financial Corp, together with the previously announced credit facility.

In connection with the financing, Tom Simpson and Jonathan Marcus join a reconstituted board. Simpson was co-founder and executive chairman of etailz up until TWEC’s acquisition in 2016, and currently serves as managing member of the Kick-Start funds.

Marcus is the CEO of Alimco and has over 30 years of experience as an investor, including numerous board roles. The financing will help etailz further develop its software and services offerings, supporting inventory expansion, and expanding into new marketplaces and geographies.

“Combined with our incredible team and partners and the exclusive focus of our board, etailz is well positioned to become the leader in marketplace software and services,” said Kunal Chopra, etailz CEO. Chopra joined etailz in August 2019 following previous experiences at Microsoft, Groupon and Amazon.

 

 

Trans World Entertainment’s Bruce Eisenberg Departs After 27 Years

Trans World Entertainment March 2 announced the departure of Bruce Eisenberg, EVP of real estate, effective immediately.

Eisenberg, who had been with the corporate parent of the f.y.e. (For Your Entertainment) home entertainment retail chain for nearly 27 years, saw his position eliminated following the $10 million sale of f.y.e. to the parent of Sunrise Records in Canada and HMV Records in the United Kingdom.

Per a regulatory filing, Eisenberg is set to receive more than $300,000 in so-called “golden parachute” compensation. His annual compensation had been $425,000. CEO Mike Feurer is on tap to receive more than $1 million in compensation should his position be eliminated.

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The 200 mall-based f.y.e. locations across the country reported an operating loss of $21.5 million, with revenue down 14.7% to $40.8 million in the most-recent fiscal period. Comparable store sales declined 5.2% — the drop largely buttressed by gains in collectables revenue.

Trans World Entertainment had warned in regulatory filings that its continued operation as a company was in doubt without deleveraging some of assets.

The company is now focused on its Etailz.com e-commerce subsidiary, based in Spokane, Wash., which has been losing money. TWEC recently took out a $25 million loan to shore up the subsidiary’s finances.

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Trans World Entertainment Selling f.y.e. Retail Chain

Trans World Entertainment Jan. 23  announced it is selling its flagship f.y.e. (For Your Entertainment) home entertainment retail chain to Sunrise Records and Entertainment Ltd. for $10 million.

The deal, pending shareholder approval, would transfer the retail brand (operating in U.S. malls and Puerto Rico) and web properties (www.fye.com and www.secondspin.com) to the parent of Sunrise Records in Canada and HMV Records in the United Kingdom.

The move comes as TWEC struggles to sustain operations in a rapidly changing retail landscape, in addition to misfires at its eTailz.com e-commerce business.

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The transaction, which was unanimously approved by the board,  follows a process in which the board said it explored all strategic alternatives. The deal is expected to close in the first quarter of 2020.

Until the deal is finalized, Trans World Entertainment will continue to operate its business in the ordinary course, and thereafter Sunrise anticipates keeping substantially all of the current FYE employees.

Following the closing, TWEC plans to focus on the operation of etailz, a Spokane, Wash.-based middleman for third-party sellers on the Internet.

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The f.y.e. chain, which operates more than 200 locations across the country, and has hailed itself as the last standalone packaged-media retailer, reported an operating loss of $21.5 million, with revenue down 14.7% to $40.8 million in the most-recent fiscal period. Comparable store sales declined 5.2% — the drop largely buttressed by gains in collectables revenue. And eTailz.com, the e-commerce middleman acquired in 2016 for $75 million, lost $1.4 million.

 

F.Y.E. Stores Expand Q3 Loss

Home entertainment retailer f.y.e. (For Your Entertainment) Dec. 17 reported a third-quarter (ended Nov. 2) operating loss of $21.5 million, compared with an operating loss of $9.5 million for the same period a year ago.

Revenue decreased 14.7% to $40.8 million, compared with $47.9 million last year. Comparable store sales declined 5.2% compared with the same quarter last year, as a comparable store sales increase of 6.3% in the lifestyle category was offset by declines in the media categories, which includes packaged media.

The lifestyle category, which includes T-shirts, posters, action figures and related collectables, represented 46.2% of revenue compared to 41.9% for the same period last year.

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Parent Trans World Entertainment attributed much of the loss to a $16 million impairment charge on long-lived assets. The company operated 206 stores in the quarter compared to 227 stores last year.

TWEC’s online aggregator eTailz.com narrowed its operating loss to $1.4 million versus a loss of $4.3 million last year. Revenue was $28.6 million, compared with $44.1 million last year.

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The decline in revenue was due to the vendor rationalization and remediation initiative. Rationalization and remediation activities included terminating unprofitable vendors and improving vendor relationships through negotiations focused on improvements to gross margins and supply chain efficiencies.

FYE Partners With Funimation on Exclusive ‘My Hero Academia’ Products

Trans World Entertainment’s FYE retail chain has collaborated with anime giant Funimation on a collection of “My Hero Academia”-themed products, available now exclusively at FYE stores and www.FYE.com for a limited time.

FYE and Funimation partnered with Japan Crate to create an exclusive triple-collaboration “My Hero Academia Crate.” The crates feature an assortment of “My Hero Academia”-themed sweets and snacks from Japan. All crates include a free trial subscription to the FunimationNow anime streaming service.

Also part of the collaboration are “Plus Ultra Cereal,” packed with Ultra Berry Blast cereal, and “Bakugo’s Explosion Chocolate Bar,” with popping candy inside.

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The new season of “My Hero Academia” is streaming now on FunimationNow and Hulu.

Trans World Entertainment Narrows Q2 Loss

Trans World Entertainment, parent of home entertainment retailer f.y.e. (For Your Entertainment), Aug. 29 announced that its second-quarter (ended Aug. 3) net loss declined 22% to $7.4 million from a net loss of $9.4 million during the previous-year period.

Revenue for the period dropped nearly 26% to $76 million, from $103 million a year ago, as both f.y.e. and the company’s online middleman business, eTailz, experience ongoing “challenges,” the retailer said.

Indeed, f.y.e. revenue dropped 17.5% as consumers increasingly skip mall-based brick-and-mortar retailers for home entertainment. The chain’s operating loss remained relatively the same at $6.6 million.

But it is Trans World’s eTailz unit that continues to underwhelm after being acquired in 2016 for $75 million. The Spokane, Wash.-based business helps third-parties sell on the Internet, notably Amazon.

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Yet, while Amazon continues to flourish, eTailz saw quarterly revenue plummet 34% to $34.2 million from $51.6 million last year.

The unit was able to narrow its operating loss to $746,000 from an operating loss of $2.7 million — largely through downsizing, including the departure of CEO and co-founder Josh Neblett.

Kunal Chopra was brought in to reverse fiscal fortunes and has apparently done just that according to Trans World CEO Mike Feurer.

“We saw the benefits of the performance improvement initiatives implemented in the fourth quarter of 2018, highlighted by improved gross margins, lower SG&A expenses and improved supply chain efficiency,” Feurer said in a statement.

“We look forward to Kunal capitalizing upon etailz’s position and opportunity as a proven leader in marketplace selling, service and expertise.”

In the meantime, Feurer said “disciplined” inventory management in the f.y.e. segment, contributed to a reduction in cash used in operations by approximately $18 million for the first twenty-six weeks of the fiscal period as compared to the first twenty-six weeks of last year.

Changes in inventory include supplanting packaged media shelf space with lifestyle merchandise, which includes T-shirts, action figures and related popular culture items.

“A 9.6% increase in our lifestyle categories demonstrates the continued positive customer response to our engaging, exclusive merchandise,” Feurer said.

FYE Chain Mounts Pop-Up Shop for San Diego Comic-Con

The FYE, For Your Entertainment, chain has mounted a pop-up shop in San Diego for the July 18-21 Comic-Con convention.

The shop, running through the end of Comic-Con, is in Horton Plaza at 4th Ave and F St, near the convention center. It features an assortment of limited edition exclusive products and shared convention exclusives, including collaborations with Funko, Adult Swim, NEFF, Nickelodeon, Garbage Pail Kids, NBC Universal, Aggretsuko and others

Convention exclusives include:

  • Child’s Play Cereal
  • SpongeBob Con tee
  • Aggretsuko Con tee and tote
  • The Creme Shop Aggretsuko beauty products
  • King Kill Kat Death Pepper from Andrew Bell
  • Rick & Morty Con Tee
  • Skate decks by Finesse featuring Quiccs, Andrew Bell, Sonic
  • Shared San Diego Comic Con exclusives

 

Other FYE exclusives include:

  • Exclusive Funko Pops
  • Quiccs Teq63 Icy Grape – very limited
  • Exclusive Stabby by Greg “Craola” Simkins
  • Ron English’s Popaganda – Monochrome Cereal Killers
  • SpongeBob x Op Exclusive Apparel
  • Garbage Pail Kids line of consumable products & tee
  • Yu-Gi-Oh consumables and tee
  • Bob Ross consumables and tees
  • Ghostbusters consumables
  • Dragon Ball Z Complete Series
  • Exclusive Vinyl, steelbooks, box sets
  • Stranger Things Cassette
  • Game of Thrones Vinyl

 

The FYE pop-up also will host fan experiences and signings throughout the convention, including:

  • Nickelodeon characters photo op
  • Tyler Bates signing, composer of John Wick and Guardians of the Galaxy
  • “Aggretsuko” meet and greet and life-size Funko box photo op
  • David Kirschner and Don Mancini, Child’s Play creators, signing
  • Ron English signing
  • Joe Simko, Garbage Pail Kids Artist, signing
  • Hi-Chew taste test sampling
  • Yu-Gi-Oh Speed Dueling in-store demo
  • “Game of Thrones” replica weapons display
  • SalesOne Pop-Up with an exclusive “SpongeBob” 20th anniversary pin

F.Y.E. Retail Stores Widen Q1 Operating Loss

Trans World Entertainment Corp. May 28 said its f.y.e. (For Your Entertainment) retail chain widened first-quarter (ended May 4) operating loss to $6.1 million compared to an operating loss of $5.4 million during the previous-year period.

Revenue dropped nearly 17% to $45 million from $54 million last year.

Comparable store sales were flat as a comparable store sales increase of 7.3% in the lifestyle category offset declines in packaged media. The lifestyle and electronics categories represented 53.9% of revenue for quarter as compared to 49.5% for the same period last year.

Gross profit was $17.5 million, or 38.9% of revenue, compared to $22.3 million, or 41.2% of revenue, for the same period last year. Gross margin improved throughout the quarter as stores refreshed trend merchandise following the holiday season.

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SG&A expenses decreased $3.5 million, or 13.1%, to $23 million, or 51.2% of revenue, compared to $26.5 million, or 49% of revenue, for the same period last year.

The decline was due to fewer stores in operation and other expense saving initiatives implemented in Q4 2018.  The increase in SG&A as a percentage of revenue was due to an increase in healthcare costs and outside consulting fees.

Meanwhile, eTailz.com, the ecommerce middleman acquired in 2016 for $75 million, narrowed its operating loss to $1.5 million from $2.8 million last year. Revenue fell 17.5% to $35.1 million from $42.5 million last year.

Regardless of continued downward financials, threat of Nasdaq delisting company shares, and a proxy attack from the son of late founder Robert Higgins, CEO Mike Feurer remains positive on the company’s future.

“Our customers continue to respond positively to our exclusive, unique and engaging merchandise,” Feurer said in a statement. “In the eTailz segment, we saw the benefits of the performance improvement initiatives, highlighted by improved gross margins, lower SG&A expenses and improved supply chain efficiency. We were able to reduce cash used in operations by over $10 million compared to Q1 of last year.”