Trans World Entertainment Corp. Heralds Video Legacy19 May, 2016 By: Erik Gruenwedel
In retail, few categories are as challenging as home entertainment — especially in a digital age. Thus, Trans World Entertainment Corp., which operates stores primarily under the f.y.e. (For Your Entertainment), Suncoast and Second Spin brands, May 19 heralded a fourth consecutive fiscal quarter of flat same-store comps.
Speaking on a May 19 fiscal call, chief merchandising officer Scott Hoffman said trend comp sales (featuring pop-culture merchandise) increased 65% from the previous-year period and represented 26% ($19.6 million) of sales, compared with 14% ($11 million) a year ago. Video comp sales fell 13%, representing 40% ($30.3 million) versus 46% ($36.4 million) a year ago.
Music comp sales dropped 11%, despite ongoing sales increases in vinyl records. Music represented 24% ($18.1 million) of revenue, compared with 27% ($21.3 million) a year ago. Consumer electronics comp sales were flat and represented 9% ($6.8 million) of sales, the same as a year ago.
“We all understand what is happening with regard to digital downloads and streaming,” said CEO Mike Feurer. “That being said, we are actually really encouraged by the lifestyle aspect and our heritage relative to the music and film video industries … allowing us to pivot and distort these opportunities in our stores.”
Specifically, Feurer said video gives f.y.e. stores “great opportunities” to engage with “this tremendously passionate customer — just in different ways.”
Video game sales declined 55%, representing 1% ($750,000) of revenue, compared with 3% ($2.4 million) a year ago.
Hoffman admitted the games category is in decline at f.y.e. and said it has been a “small” portion of the business for some time. At the same time, he denied the company was exiting games, calling ancillary merchandise related to gaming key to the emerging trend category.
“We look at games as a lifestyle business, not just [a] physical games [business],” Hoffman said.
Total revenue decreased 4.3% to $75.7 million, from $79.2 million in the previous-year period. The Albany, N.Y.-based distributor attributed much of the revenue decline to 6.5% drop in stores in operation from 310 to 290. Net income dipped slightly to $27,000 from $194,000.
The retailer is remodeling stores — 13 thus far — to accentuate changing consumer habits.
“We continue to be encouraged by the performance of the new-format stores,” Feurer said. “These stores further capitalize on our unique and wide-ranging demographic … and the loyalty of our customer base.”