Trans World Opening Additional Stores in 201315 Nov, 2012 By: Erik Gruenwedel
Retailer cites 6% rise in same-store sales of movies, spearheaded by 'The Avengers' and 'The Hunger Games'
Bucking the trend, Trans World Entertainment Corp. Nov. 15 said it would open new retail stores in 2013 — notably in shopping malls — citing increased consumer and landlord demand for packaged media sellthrough.
New York-based Trans World operates 376 f.y.e. (For Your Entertainment) retail locations and Second Spin used packaged media stores nationwide, in addition to related websites.
In a third-quarter (ended Oct. 27) fiscal call, CEO Bob Higgins wouldn’t disclose the number or locations of the stores but said the f.y.e. locations would likely occur in high-traffic shopping malls. The chain has relocated eight stores this year and opened a location at Annapolis Mall in Maryland in September.
“We feel there are a number of malls that need our category,” Higgins said. “We feel we can open [a new store] in the first year and have a very profitable store and then comp up after that.”
Higgins wouldn’t say how many stores Trans World plans to open, or where, but added that landlords have indicated they find value in the entertainment retail category.
“[Store] closings are going to be a lot less as we go forward,” he said. “In general, [underperforming stores] are becoming a minor issue for us.”
Trans World reported a third-quarter loss of $2.2 million, which was $2.3 million (51%) less than the entertainment retailer lost during the previous-year period. Same-store sales declined 2%.
Comparable store video sales increased 6% in the quarter and now represent 45% of total sales compared to 42% last year. Disney/Marvel’s The Avengers and Lionsgate’s The Hunger Games, as well as strong catalog sellthrough, drove video sales.
Meanwhile, music sales declined 14% with the category representing 31% of revenue compared with 35% last year. Consumer electronics increased 2%, representing 10% of sales, up 1% from a year ago. Trend sales increased 10%, representing 10% of sales (up 1%), while video games sales dropped 20% with the category, representing 4% of sales compared with 5% last year.
Total sales declined 17% to $91.8 million compared with $110 million last year, when it operated 440 stores nationwide. It expects to lose about $400,000 in sales due to the impact of Hurricane Sandy on the Northeast.
“We don’t think it had much effect on us at all,” Higgins said.
Year-to-date, Trans World has narrowed its net loss 91% to $1.3 million compared with $14.3 million last year. The chain said improved operating efficiencies through shuttering of underperforming stores and 18% drop in sales, general and administrative expenses.
“The third quarter marked our 11th consecutive quarter of improved operating results,” Higgins said. “We're moving in the right direction and look forward to the remainder of 2012 and beyond.”