Delia’s Q1 Loss Widens, Names New CEO

Delia'sNew York—Noting “disappointing” performance in what the company called a “challenging retail” environment, Delia’s today reported its first quarter loss widened as sales decreased.

For the quarter ended May 4, the teen specialty retailer posted a net loss of $9.2 million, or 29 cents a share, compared to a loss of $3.6 million a year ago. That was worst than the 7 cents a share loss that analysts’ predicted.

Net revenue was down 14.6% to $35.2 million. Revenue in the retail segment decreased 14.4% to $24.7 million with comparable store sales down 7.1% (and 8% fewer stores). Revenue from the direct segment decreased 15.3% to $10.5 million.

Total gross margin narrowed to 23.8% compared to 31.6% in the prior year quarter, primarily due to increased inventory reserves, as well as lower merchandise margins in the retail segment.

New CEO Named

Walter Killough commented, “We were disappointed with our first quarter performance, which we believe was the result of product offerings that did not align with our customers’ preferences coupled with a challenging retail environment underpinned by unseasonable weather,” said Walter Killough, chairman/ceo. “We have taken aggressive action to work through our current inventory and began to make adjustments to our product offerings which have already yielded improved results. With the potential disposition of Alloy, we are currently evaluating our cost structure in order to right-size the business.”

In other news, Delia’s announced that Tracy Gardner has been appointed chief executive officer effective June 5. Gardner joined Delia’s earlier this month as chief creative officer. Killough will remain as chief operating officer.

“I am excited about the opportunity to create a long term vision for the Delia’s brand,” Gardner said. While developing and executing a strategic plan will take time, I look forward to working with the team to build Delia’s into the brand we all know it can be.”

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com