Trans World Entertainment Stock Plunges Following Poor Fiscal Results

Despite a 1-for-20 shares reverse stock split, shares of Trans World Entertainment plunged more than 30% Aug. 29 after the parent to home entertainment retailer f.y.e. (For Your Entertainment) reported dismal quarterly earnings.

Indeed, fye comparable store sales decreased 1.2%, compared to an increase of 9.6% during the previous-year period. Increases in lifestyle categories were offset by declines in electronics and packaged media movies, TV shows, music and video games. Comp revenue in the electronics category decreased 0.1%.

Video sales were down 16.1%, due to the underperformance of new releases impacted by soft theatrical releases.

“A headwind that will continue to influence this category in the second half of the year,” CFO Edwin Sapienza said on the fiscal call.

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Lifestyle and electronics categories represented 58% of $76 million revenue for the second quarter as compared to 53% last year. Media category comp sales declined 12.8% for the quarter, and represented 42% of the f.y.e. segment sales compared to 47% last year. Music sales were down 7.8%.

“We continue to see strong sales of K-pop merchandise,” Sapienza said.

The company operated about 200 f.y.e stores in the period compared to 241 stores last year.

F.Y.E. Parent Back in Nasdaq Compliance

Trans World Entertainment Corp., parent of mall-based home entertainment retailer f.y.e. (For Your Entertainment), said it has been notified by Nasdaq that its stock is again in compliance with the trading board.

At issue was TWMC’s ability to meet Nasdaq’s minimum $1-per-share stock valuation. Failure to do so can resort to delisting, which can negatively impact a company’s ability to generate funding, among other issues.

On Nov. 16, TWMC said it received written notice from Nasdaq stating that the company’s common stock had a closing bid price of at least $1 per share for 10 consecutive business days (from Nov. 2 to 15).

In a statement, the company said it had regained compliance with Nasdaq Listing Rule 5450(a)(1) and “the matter is now closed.”

TWMC shares closed Nov. 20 at $1.02 per share

Trans World Entertainment Amends Credit Facility Regarding F.Y.E. Store Closures

Trans World Entertainment, parent of the f.y.e. (For Your Entertainment) home entertainment retail chain, Nov. 1 announced an amended agreement with Wells Fargo regarding its five-year, $75 million revolving credit facility.

Specifically, TWEC agreed to receive written consent from Wells Fargo prior to closing additional f.y.e. store locations. The company said closures would not exceed 35 locations, or 68 stores in aggregate through the end of the fiscal year (Feb. 2, 2019).

The agreement provides that any store closures from the signing of the amended agreement until the end of the fiscal year shall be made in accordance with liquidators or liquidation consultants “reasonably” acceptable to Wells Fargo.

Mall-based f.y.e. posted an operating loss of $6.6 million in its most-recent fiscal period operating 241 stores. Revenue dropped 15% to $104.6 million from $123.9 million.

Trans World Entertainment CFO John Anderson Dies

Trans World Entertainment Corp., parent of home entertainment retailer f.y.e. and ecommerce platform Etailz.com, Oct. 15 announced the unexpected Oct. 10 passing of CFO John Anderson. He was 49. Cause of death was not disclosed.

During a 23-year career at TWEC, Anderson served as CFO for the past six years.

“The entire team at Trans World and I are deeply saddened and shocked by the passing of John Anderson,” CEO Mike Feurer said in a statement. “John was greatly admired and respected by those fortunate enough to have worked closely with him. His life touched and had a very positive impact on everyone who knew him.”

Anderson is survived by his wife, Denise (Coffin) Anderson, two children, his parents and siblings, among others.