Trans World Reduces First-Quarter Loss20 May, 2010 By: Erik Gruenwedel
Trans World Entertainment, parent of retail chain F.Y.E. (for your entertainment), May 20 reported a first-quarter (ended May 1) net loss of $11.4 million, narrowed from a net loss of $13.7 million during the previous-year period.
Albany, N.Y.-based Trans World said sales fell 18% to $156.5 million from $191.4 million last year, due in part to a 23% decline (161 stores) in the number of retail locations operated.
The chain operated 548 stores in the quarter, compared with 709 stores in 2009. It closed 18 stores in the period and acquired five Value Music locations.
DVD and Blu-ray Disc movie sales increased 1%, driven largely by greater consumer appreciation for the high-definition format, according to Trans World founder and CEO Robert Higgins, who added that home video sales industrywide were down 5% in the quarter.
Home video represents 44% of the company’s business, up from 43% last year.
“We are seeing broad acceptance of this format,” Higgins said in an investor call. “Comp-store sales in our two largest categories — music and DVD — have reversed trends we have seen over the last several years.”
Same-store sales decreased 3%, driven by a 36% decline in video game sales.
Higgins said the drop in game sales was largely due to a previous strategic decision to eliminate games in more than 200 stores.
Vowing to remain one of the last music CD retailers on a national level, Trans World reported a 1% decline in music sales, which represented 36% of overall revenue. By comparison, the music retail industry was down 12% in the quarter, according to Higgins.
Trans World said it cut sales, general and administrative expenses 22% to $59.3 million from $75.7 million last year.