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Trans World Entertainment Widens Q2 Loss

7 Sep, 2017 By: Erik Gruenwedel



When Trans World Entertainment acquired digital retail platform Etailz.com last October, the strategy was to buttress declining legacy music and home video sales with third-party e-commerce and collectibles.

Fast-forward to the present with the corporate owner of the f.y.e. (For Your Entertainment) retail chain reporting a 48% increase in Etailz revenue in the second quarter (ended July 29), including $43.5 million (42.5%) of the TWEC’s $102.4 million quarterly revenue.

Etailz, which was acquired for $75 million, sells merchandise largely through Amazon and other e-commerce platforms. It generated a $98,000 operating profit.

Meanwhile, TWEC reported a $5.4 million f.y.e. operating loss on revenue of $58.9 million. This compared with a loss of $4.5 million on revenue of $64.3 million during the previous-year period.

Specifically, the company reported a 14.8% decline in same-store video sales of DVD and Blu-ray Disc content to $18.1 million in the quarter, or 30.8% of total revenue, down from $23.4 million (36.4%) a year ago.

Packaged-media music generated $12.1 million in sales, or 20.6% of revenue, down from $15.8 million (24.7%) a year ago.

“July sales were impacted by physical media declines and weak summer box office, which will continue as headwinds into the second half of the year,” CEO Michael Feurer said on a recent fiscal call.

The biggest bright spot continues to be the lifestyle category, which includes collectibles, action figures, posters, T-shirts and related popular culture content. The category generated $21.8 million (37%) in revenue, compared with $18.5 million (28.8%) a year ago.

“We are focused on identifying, creating and delivering merchandise that differentiates our customer experience and brand,” said CMO Scott Hoffman.

The company ended the quarter with 269 stores in operation, compared with 290 stores a year ago.

 


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