Trans World Entertainment Ups Q4 Income3 Mar, 2011 By: Erik Gruenwedel
Showing resilience as the last nationwide pure entertainment retailer, Trans World Entertainment Corp. March 3 reported fourth-quarter (ended Jan. 29) net income of $12.4 million, compared with net income of $11.4 million during the previous-year period. That year-ago period included a one-time tax benefit of $10.3 million.
Albany, N.Y.-based Trans World properties include f.y.i. and Second Spin stores and related websites.
CFO John Sullivan said the improved results were the result of better category management, especially regarding gross margins. He said the company also received broader vendor markdowns across all categories. Trans World closed 73 stores, compared with 133 stores in 2009.
Overall same-store sales dropped 6%, largely due to declines in music CD sales. Video sales, including DVD and Blu-ray Disc, were flat.
Trans World founder and CEO Robert Higgins said that despite the declines, both categories outperformed the home entertainment retail industry.
Video game sales fell 38%, largely due to the category’s reduced retail footprint. Only 127 out of 514 stores carried games in the quarter, compared with more than 300 last year.
Electronics, accessories and trends same-store sales fell 6%. The category represented 15% of Trans World’s yearly business.
For the year, comp store sales declined 4% on revenue of $652.4 million, which was down 20% from revenue of $814 million in 2009. In 2010, Trans World operated 532 stores, compared with 688 in 2009, a 23% decline. The company currently operates 460 stores.
Video same store sales for the year increased 1% and represented 44% of overall business, compared with 42% in 2009. Comp music sales fell 4% and represented 36% of sales versus 35% in 2009. Video game comp sales dropped 38% and represented 6% of revenue, compared with 9% in 2009.
Trans World reported a fiscal year net loss of $31 million, compared with a net loss of $42.4 million in 2009.