Trans World Entertainment Founder/CEO Retiring6 Mar, 2014 By: Erik Gruenwedel
Bob Higgins started the retail chain in 1972 when it was called Trans World Music Corp.
Bob Higgins, founder and CEO of Trans World Entertainment Corp., March 6 said he is retiring from the retail company he launched in 1972. Higgins, who will act as interim CEO until a replacement is found, retains his chairman position.
The 73-year-old Higgins made the announcement during the company’s fourth-quarter fiscal call.
“It is an exciting time for our company and I look forward to our working with my successor on continuing our strategic vision,” Higgins said.
Albany, N.Y.-based Trans World operates stores in the United States primarily under the names f.y.e. (“for your entertainment”), Suncoast and on the Web.
Higgins broke into retail in the late 1950s as a music “rack jobber” stocking 45 rpm singles and vinyl albums in department stores. He founded Trans World Music Corp. in 1972. Trans World went public in 1986.
At the height of music CD’s popularity in 2000, Trans World was reporting annual revenue exceeding $1 billion while operating more than 1,100 stores. As piracy and music downloads supplanted CDs, Higgins considered launching a music download service, but instead refocused the company on DVDs.
Indeed, sales of DVD and Blu-ray Disc represented 44% of Q4 sales, while music represented 26% of sales.
"If [music] had remained our primary business, I don't think we would have survived," he told Albany Business Review last year.
In the past 12 years, Higgins has shuttered more than 700 stores — until 2013, when the CEO announced the planned opening of 20 new f.y.e. locations.
“We think 18 of those stores will make money in year one and the other two will make money in year two,” Higgins said in a fiscal call last year.
To call Higgins a visionary would be incomplete. He is the last man standing in entertainment retail. When Trans World experienced successive years of losses from 2008 through 2011, conventional wisdom suggested the chain and packaged media retail were history.
Yet, Higgins remained committed to proving he could return the chain to profitability — which he has done so for the last three years, according to Ed Christman, editorial director at Billboard, who has covered the chain for decades.
"[Higgins] figures he can head toward the exit with his head held high," Christman said.
Meanwhile, Trans World reported fourth-quarter (ended Feb. 1) net income of $12.5 million, up $300,000 from net income of $12.2 million during the previous-year period. For the fiscal year, Trans World reported net income of $8.3 million, down nearly 24% from net income of $10.9 million a year ago.
Comparable-store sales in the quarter dropped 5.3%. Total sales decreased 14.8% to $139.2 million, compared with $163.4 million in 2012. The decrease in sales was due to one less week of business and a 5.1% decline in average stores in operation to 354 locations compared with 373 stores a year ago.
The company announced a special cash dividend of $0.50 per common share, payable April 3, to shareholders of record at the close of business on March 20. The total special dividend payout is estimated to be $16 million, and to be paid from cash on hand.
"We are pleased to reward our shareholders with a special dividend. We continue to maintain strong financial flexibility and working capital to fund our growth initiatives," Higgins said in a statement.