Turnaround Costs Push Caché into Q2 Loss

New LBD from Cache's fall collections

New LBD from Cache’s fall collections

New York—Costs of its turnaround efforts cut into Cache Inc.’s latest earnings, pushing the specialty retailer into a second quarter loss.

For the quarter ended June 29, Cache posted Tuesday a loss of $3.16 million, or 17 cents a share, compared with a profit of $1 million, or 8 cents a share, a year ago. Included in the figures were incurred costs of $956,000 associated with employee separation charges.

Excluding those costs, the adjusted earnings resulted in a loss of 12 cents a share. That was in line with analysts’ average estimate.

‘Improved Position’ for Q3

Net revenue declined 2.5% to $60.1 million. Comparable store sales edged down 0.5% percent compared with 4.7% growth in the same quarter 2012.

Gross margin narrowed to 34.7%, down from 42.8% a year ago driven by an increase in markdowns on prior season assortments.

“During the quarter, we focused on clearing assortments that were not consistent with our go-forward merchandising plan and significantly reducing promotional activity on the web while continuing to make strategic hires to allow us to drive our business forward,” said Jay Margolis, chairman/ceo. “While our turnaround efforts negatively impacted profitability in the quarter, this activity allowed us to begin the third quarter in an improved position.”

In addition to recently announcing a new, five year, $25 million credit facility through Wells Fargo Capital Finance, Cache also named Tony DiPippa as chief financial officer.

 

 

 

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Jeff Prine

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