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Trans World Entertainment Opening More Stores

19 Nov, 2015 By: Erik Gruenwedel

Chain transitioning packaged-media shelf space to trend

Despite a challenging retail backdrop for home entertainment, Trans World Entertainment is opening more f.y.e. (For Your Entertainment) stores, including four new locations, and remodeling other stores. Trans World also operates Second Spin used packaged-media stores and select Suncoast locations.

The company opened two f.y.e. stores and remodeled two during the third-quarter, ended Oct. 31. During the current fourth quarter, it is opening four more stores and remodeling two under the same format, bringing the total new and remodeled store count to 10 by the end of the quarter.

In Q3, Trans World operated 309 total stores, compared with 327 stores during the previous-year period, a 5.5% decline.

“Early indications are the new stores are being well received by customers, the associates are very excited about the concept, our industry partners are enthusiastic, and the store performance has been encouraging,” CEO Mike Feuer said on the company's Nov. 19 fiscal call.

CFO John Anderson said the company is spending about $200,000 per store on remodeling, with improvements (product presentation, stocking, etc.) expected to pay for themselves over a year.

“We are looking at ROIs in the 40% to 50% range,” he said.

Yet within f.y.e. stores, packaged-media sales are declining. The company saw a 11% decline in same-store video sales of movies and TV shows. Video represented 41% of sales ($27.8 million) versus 45% ($32.5 million) a year ago.

“We continue to see industry-wide declines in physical video due to non-physical options and we are adjusting our inventory position accordingly,” said chief merchandising officer Scott Hoffman.

In video’s place, f.y.e. is upping trend, which includes movie and TV show posters, action figures and related collectables and memorabilia.

Trend comp sales increased 50% in the quarter, representing 23% ($15.6 million) of sales, compared with 15% ($10.8 million) a year ago.

Electronics comp sales increased 8%, representing 9% ($6.1 million) of revenue, which is the same percentage as a year ago.

Music comp sales declined 8% and represented 25% ($16.9 million) of revenue compared to 27% ($19.5 million) a year ago.

Video game comp sales were down 38% and represented 2% ($1.3 million) of the company's business for the quarter, compared with 4% ($2.9 million) a year ago.

Trans World posted a net loss of $4.3 million, compared with a net loss of $4.5 million a year ago.

About the Author: Erik Gruenwedel

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