March 28, 2019
In a reversal of industry trends, Trans World Entertainment Corp. March 28 reported a 2.8% increase in fourth-quarter (ended Feb. 2) same-store sales in its f.y.e. (For Your Entertainment) mall-based packaged media retail stores.
At the same time, Etailz.com, the online retail subsidiary TWMC acquired in 2016 for $75 million, reported a $62 million loss from operations, which involved a $57 million impairment charge related to company restructuring and 30% workforce reduction – including some senior management.
“This [2.8%] marked the second consecutive quarter of positive [f.y.e.] comp sales,” CEO Mike Feurer said in a statement. “Our customers continue to respond positively to the changes in our merchandise assortment and presentation that were made to counter declining mall traffic and the ongoing declines in physical media.”
Indeed, 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 from $92.4 million from the previous-year period. Operating loss narrowed to $1 million from a loss of $2.4 million during the previous-year period.
Fiscal-year store revenue declined 14% to $231.2 million from $268.3 million during the previous-year period.
Meanwhile, Spokane, Wash.-based Etailz, which helps third parties monetize online sales through platforms such as Amazon, Walmart.com and eBay, posted revenue of $48.6 million, down almost 9% from revenue of $53 million last year.
For the year, revenue increased 7% to $186.9 million from $174.4 million.
“In response to the decline in operating results, we’ve engaged outside support and initiated certain strategic changes to create operational efficiencies directed towards improving [Etailz’s] performance and cash flow,” said Feurer. “We remain confident in the underlying opportunity afforded by etailz as a top marketplace retailer and service provider.”
Trans World Entertainment shares closed up 5.5% at 47 cents per share on March 27.