St. Louis–Bakers Footwear Group reported Thursday a narrower first quarter loss and announced a new four-year $30 million credit facility with Crystal Financial LLC that will help the footwear retailer’s liquidity.
The agreement, which replaces one with Bank of America, “enhances our financial flexibility as we lengthen the maturity by three years and increase the availability under the facility by several million dollars,” said Peter Edison, Bakers’ chairman/ceo.
Bakers updated its fiscal year forecast, saying it expects mid- to single-digit decreases in comparable store sales during its second quarter and mid-single digit increases in comp sales for the second half of the year. Comparable store sales through June 9 are down 4.4%, the company said.
‘Cost Reduction Programs’ to Improve Results Ahead
For the quarter ended April 28, Bakers posted a net loss was $1.1 million, or 11 cents a share, compared to a net loss of $2.5 million, or 27 cents a share share, a year earlier.
Net sales decreased 5.7% to $44.3 million with comparable store sales down 2.5% compared with an increase of 9.3% a year ago.
While Bakers reduced costs during the quarter, a series of losses and lower-than-expected sales took a toll on the company’s finances. As of April 28, Bakers said it had “it had “negative working capital” of $18 million, unused borrowing capacity under its revolving credit facility of $1.3 million, and a shareholders’ deficit of $17.6 million.
Bakers said based upon its business plan–including the anticipated impact of the margin improvement and cost reduction program—the company “has adequate liquidity to fund anticipated working capital requirements and expects to be in compliance with its financial covenants throughout 2012.”
“As we look ahead, we continue to expect our strategies to result in improved gross margin and operating performance in 2012 as we prudently manage inventory and focus on turns,” Edison said. “We expect this effort along with our cost reduction programs will improve our operating results, liquidity and financial position.”