Trans World Entertainment Widens Loss20 Nov, 2014 By: Erik Gruenwedel
Mark Higgins, SVP of merchandising, and son of founder and former CEO Robert Higgins, resigns
Trans World Entertainment Corp. Nov. 20 reported a third-quarter (ended Nov. 1) loss of $4.5 million, compared with a loss of $3.3 million during the previous-year period. Revenue decreased 9.2% to $72.5 million, due in part to a 8% drop in year-over-year store count.
Albany, N.Y.-based Trans World operates 328 retail stores selling home entertainment packaged media, including movies, music, video games, consumer electronics and trend, under the f.y.e. (For Your Entertainment), Suncoast and Second Spin brand names.
Through Nov. 1, total sales decreased 9% to $231.6 million, compared with $254.5 million for the same period in 2013. Comparable store sales for the 39-week period decreased 1.5% compared with the same period last year. Net loss for the 39-week period was $10 million, compared with a net loss of $4.3 million for the same period last year.
The company announced that Mark Higgins, SVP of merchandising, had tendered his resignation, effective Nov. 21. Higgins is the son of founder and former CEO Robert Higgins, who announced his retirement in March. Mark Higgins has been a member of the merchandising department since 1994, including overseeing the video and video game departments from 2007 to 2014.
Bob Higgins remained in charge until the appointment of Mark Feurer as new CEO on Oct. 13. Feurer, 44, earns a base salary of $635,000, in addition to being eligible for related compensation and bonuses. He also received a one-time signing bonus of $100,000.
In his first fiscal call, Feurer said same-store sales of movie discs declined 3% from last year. Feurer attributed the drop to a reduction in new releases from studios and the lingering impact from the soft summer box office. Home video represented 45% of Trans World's business compared with 46% a year ago.
Music comp sales declined 10% and represented 27% of total revenue compared with 30% last year. Feurer said Trans World would continue to shift store space and product spending away from music and likely toward trend, which saw a 22% jump in same-store sales. Trend, which includes action figures, T-shirts, posters and related collectibles, represented 15% of sales compared with 12% a year ago.
Consumer electronics comp sales increased 5% and represented 9% of sales, up 1% year-over-year. Video game sales dropped 10% due in large part to the timing surrounding availability of Grand Theft Auto V for PlayStation 4.
Regardless, Feurer remains upbeat on the future of Trans World Entertainment.
"The company has a tremendous opportunity to continue its evolution as the destination entertainment-centric and pop culture-related products," Feurer said.