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 Secures $25 Million Loan for eTailz Business

On the heels of selling its legacy home entertainment retailer, For Your Entertainment (f.y.e.), for $10 million, Trans World Entertainment Corp. has secured $25 million in funding for its eTailz.com e-commerce business.

TWEC acquired etailz for $75 million in 2016 as a means of jumpstarting an ecommerce business segment. The Spokane, Wash.-based company claims to use proprietary software and e-commerce insight to help third parties identify new distributors and wholesalers, discover emerging product trends, and optimize price positioning and inventory purchasing decisions.

The business largely (85%) does this through Amazon as a “marketplace retailer” partnering with brands to help them grow sales both domestically and internationally. Etailz also partners with companies to expand their brand on eBay, Jet and Walmart.

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TWEC said it plans to use the $25 million loan facility to better capitalize etailz’ growth goals, which include further development of software and services offerings, supporting inventory expansion, and expanding into new marketplaces and geographies.

“The sale of our FYE segment has put our stores and employees in the best position to continue forward and build upon an almost 50 year legacy,” Michael Feurer, CEO of TWEC, said in a statement.

Feurer said securing of the credit facility for etailz is a “positive and important first step” for the subsidiary, which becomes the main focus of TWEC going forward.

No small task considering etailz has been largely unprofitable since the merger — a reality that saw co-founder and CEO Josh Neblett exit the company about a year ago.

Brock Kowalchuk is the new CFO and Lisa Wideman was hired last November as senior director of human resources. Mitchell Bailey remains as chief operating officer.

New CEO Kunal Chopra contends “100%” that the unit reportedly with 166 employees will grow in 2020. It employed 288 people in 2018.

Whether that growth is an operating loss or profit remains to be seen. In its 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.

 

Trans World Entertainment Shareholders Approve FYE Sale

Shareholders of fiscally challenged Trans World Entertainment Corp. have overwhelmingly approved the sale of home entertainment retail chain For Your Entertainment (f.y.e.).

New York-based TWEC said a special shareholders meeting held on Feb. 17 saw more than two-thirds of shareholders approve the previously-announced sale of substantially all of the f.y.e. assets to a subsidiary of Sunrise Records and Entertainment Ltd., parent of Sunrise Records in Canada and HMV Records in the United Kingdom, for $10 million in cash.

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The closing of the transaction is subject to the satisfaction or waiver of customary closing conditions set forth in the purchase agreement, including the receipt of certain third party consents which are expected shortly. All of the proceeds from the Transaction will be used to repay outstanding indebtedness and to satisfy other assumed liabilities.

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Indeed, f.y.e., which operates more than 200 mall-based 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.

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.

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.

Trans World Entertainment Switching Nasdaq Markets

As expected, fiscally-challenged Trans World Entertainment Corp. is taking its stock from the Nasdaq Global Market to the Nasdaq Capital Market, effective July 18.

The corporate parent to home entertainment retailer For Your Entertainment (f.y.e.) made the switch to avoid exceeding a 180-day grace period granted by Nasdaq to bring its stock above the minimum $1-per-share threshold.

Trans World, which is affecting a 1-for-20 shares reverse stock split on Aug. 15, now has another 180-period until Jan. 13, 2020 to bring its share price above the $1 minimum valuation.

The reverse stock split is primarily intended to bring TWEC into compliance with the minimum average closing share price requirement for maintaining its listing on the Nasdaq Capital Market. The company’s common stock will continue to trade under the symbol “TWMC”.

The split will reduce the number of shares of outstanding common stock from approximately 36,258,839 million shares to approximately 1,812,941 million shares.

TWEC shares closed July 16 at 28 cents per share. The company has a market capitalization of just $10.3 million.

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

Trans World Entertainment Names New Etailz CEO

Trans World Entertainment Corp. July 10 announced that Kunal Chopra has been named CEO of eTailz.com, reporting directly to Mike Feurer, CEO of the parent company.

Acquired by Trans World Entertainment in 2016 for $75 million, eTailz acts as middleman seller on platforms such as Amazon and Walmart.com.

The Spokane, Wash.-based company, which was expected to help offset ongoing challenges at Trans World’s mall-based f.y.e. entertainment retail chain, reported a $62 million loss from operations in the most-recent fiscal period. That involved a $57 million impairment charge related to company restructuring and 30% workforce reduction – including CEO and co-founder Josh Neblett.

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Kunal Chopra

Chopra, who has a website touting his entrepreneurial/management skills, will be responsible for all operations and performance of etailz.

“I am extremely pleased to have someone with Kunal’s breadth and depth of experience and leadership join our team as CEO,” Feurer said in a statement. “Kunal brings a unique combination of technological expertise, entrepreneurial character and operational excellence.”

Indeed, Kunal has more than 15 years of executive experience working with companies such as Microsoft, Amazon, and Groupon. Throughout his professional career, Kunal has led organizational transformation, new business and product development, strategy formulation and execution, and product launch at scale.

Trans World Entertainment needs all the help it can find.

Retailer f.y.e., which operates more than 200 stores nationwide, has been pushing trend items, including collectibles, action figures, posters, T-shirts and related merchandise.

Regardless, store revenue dropped 15% to $78.8 million, while operating loss narrowed to $1 million. Fiscal-year store revenue declined 14% to $231.2 million.

The company’s board recently authorized a 1-for- 20 shares reverse stock split to keep it in compliance with Nasdaq requirements.

The board also added Jeff Hastings, a senior executive at Paramount Home Entertainment.