F.Y.E. Stores Generate $8.3 Million Q4 Profit16 Mar, 2017 By: Erik Gruenwedel
Entertainment retailer loses $1.9 million for the fiscal year
Trans World Entertainment Corp. March 16 reported fourth-quarter (ended Jan. 28) income of $8.6 million on revenue of $147.1 million, compared with income of $10.2 million on revenue of $122.6 million during the previous-year period.
Trans World owns and operates the f.y.e. (For Your Entertainment) retail chain selling packaged media and trend (T-shirts, collectibles, action figures, etc.), in addition to e-commerce company Etailz.com, which it acquired last October.
For the fiscal year, the company reported a net loss of $4.3 million income on revenue of $313.2 million, compared with net income of $4.5 million and revenue of $339.5 million in the previous-year period.
Retailer f.y.e. saw Q4 operating income fall 18.5% to $8.3 million, from $10.2 million, on revenue of $110.6 million, compared with $122.6 million in 2015. Etailz reported income of $705,000 on revenue of $36.4 million. For the fiscal year, Etailz generated $677,000 in income on revenue of $40.2 million.
Comparable f.y.e. store sales declined 6.9% compared with the same quarter last year, as comp increase of 18% in trend did not fully offset 22% decline in heritage media categories. The trend category represented 38% of Q4 business, compared with 29% in the same period a year earlier.
CEO Mike Feuer said slowdown in mall traffic (most f.y.e. stores are mall-based), coupled with ongoing declines in music CD and movie DVD, Blu-ray Disc sales contributed to the decline.
Indeed, video comp sales declined 20% in the quarter, representing 28% of total revenue compared to 33% a year ago. For the fiscal year, comp video sales declined 15%. Video represented 34% of f.y.e. revenue during the year compared with 43% in 2015.
Music comp sales in Q4 declined 22%. The music category represented 18% of total business compared to 22% a year ago. For the year, comp sales for music declined 16%. The music category represented 22% of business for the year, compared with 26% a year earlier.
“Both the video and music categories were impacted by weaker new releases this year compared to last year. While these categories continue to decline, they still represent 56% of our business,” Scott Hoffman, chief merchandising officer, said on the fiscal call.
Trend represented 38% of overall business, compared with 29% a year ago. For the year, comp sales increased 31%. Trend represented 32% the business for the year compared with 22% a year ago. Electronics comp sales increased 1%. Electronics represented 15% of revenue for the quarter, compared with 13% a year ago. For the year, comp sales for electronics also increased 1% and represented 11% of business compared to 9% a year before.
“Our results demonstrate the importance, benefit and potential of our acquisition of etailz,” said Feuer.
When asked if Etailz would help sell packaged media, Feuer said the e-commerce service would operate as a standalone business with some synergies.
“There are things like [packaged media], but vendor access or costing or even a corporate data approach … I mean these are just a couple of the things that we're already unlocking through this relationship,” he said.