March 22, 2018
Trans World Entertainment Corp. March 22 reported a fourth-quarter (ended Feb. 3) loss of $32.3 million compared to net income of $8.9 million during the previous-year period. Revenue dipped slightly to $145.4 million from almost $147 million.
The increased loss was primarily due to a one-time non-cash $29.1 million impairment charge for certain long-lived fye assets.
New York-based TWEC operates mall-based “fye” (For Your Entertainment) retail stores and etailz.com, an online retailer primarily selling through Amazon.
Retail stores, which sell packaged media, consumer electronics, video games and trend, saw same-store sales fall 10%, with revenue dropping 16.4% to $92.4 million from $110.5 million last year. The company operated 260 stores at the end of 2017 compared to 284 stores at the end of 2016.
CEO Mike Feurer said the fye continues to reduce “slow-moving” merchandise while upping “newer assortments” product categories. He said retail stores continue to be negatively impacted by declining foot traffic in malls and declining physical media sales. He said the company is the process of “re-inventing” the fye brand.
Specifically, lifestyle (trend) same-store sales declined 3%, representing 41% ($37.4 million) of sales compared to 38% last year. Electronics dipped 3%, representing 16% ($14.7 million) of revenue compared to 12% the previous year. Media sales (video and music) fell 17%, representing 43% ($39.6 million) of revenue compared to 50% last year. Music sales dropped 18% and video sales fell 16%.
“As we work through the assortment changes needed to stabilize the fye business, we have maintained focus on the balance sheet, ending the year in a favorable cash position to last year, with $31 million on hand and no debt,” Feurer said in a statement.
Meanwhile, etailz.com, the ecommerce unit acquired in 2016 for $75 million, reported a net loss of $675,000 compared to income of $788,000 a year ago. Revenue increased 45% to $53 million from $36.4 million.
Nonetheless, Feuer said etailz continues to capitalize on the “rapid growth” of marketplace sales, affording TWEC with the opportunity to benefit from “explosive” long-term trends underway in retail.