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FYE Retail Chain Widens Q3 Loss

21 Nov, 2017 By: Erik Gruenwedel

Trans World Entertainment Corp. Nov. 21 said the “For Your Entertainment” (fye) retail unit posted a third-quarter (ended Oct. 28) operating loss of $7.8 million, up 56% from a loss of $5 million during the previous-year period. Revenue declined almost 17% to $52.1 million, from $62.4 million.

Total fye revenue declined 16.6%. Comparable store sales declined 11% compared with the same quarter a year ago. 

Mall-based fye stores sell packaged media, including DVD and Blu-ray movies, video games, trend collectibles and assorted consumer electronics.

“fye revenue continues to be impacted by declining mall traffic, the general accelerated decline in the physical media business and the specific lack of strong franchises resulting from the lowest summer box office in 25 years,” CEO Mike Feurer said in a statement.

Indeed, media sales, which include physical discs, declined 18% and represented 52% of sales, compared to 58% last year. The decline comes despite management efforts to stabilize the fye brand, including replacing slow-moving inventory and adjusting purchases to align inventory levels with current business trends. But cyclical changes in entertainment options and how people consume them continue to affect the bottom line.

“This impacted our lifestyle categories as well,” Feurer said.

TWEC’s lifeline (on paper, anyway) is etailz.com, an e-commerce platform acquired a year ago that sells merchandise mostly via Amazon.

Etailz.com contributed almost $41 million in TWEC revenue, up from $3.8 million a year earlier. It posted an operating loss of $253,000 — down from a loss of $2.7 million.

TWEC overall reported a net loss of $8.1 million on revenue of $93 million. That compared with a loss of $7.8 million on revenue of $66 million a year ago. It operated 268 stores in the quarter compared to 294 stores last year.

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