MONTREAL – Reitmans (TSX:RET.A) is reporting a big increase in its first-quarter net loss as the Montreal-based women’s wear retailer suffered a more than $10-million drop in sales revenue as a result of poor weather combined with a net reduction of 47 stores compared with the same year-earlier period.
Reitmans, operator of such banners Reitmans, Smart Set, RW&Co, Penningtons and others says its net loss soared to $13.4 million or 21 cents per diluted share in the three months ended May 3.
That compared with a net loss of $2.6 million or four cents per share in the comparable 2013 period.
Revenue fell to $206.5 million from $216.9 million as poor weather dampened demand for spring and summer apparel.
Same-store sales decreased by 3.6 per cent, while the net reduction in the number of stores accounted for about $5 million of the decrease, the company said in a release issued Wednesday after markets closed.
Gross margin for the quarter decreased to 59.4 per cent from 64.6 per cent in the prior-year period, negatively impacted by the weaker Canadian dollar against the U.S. dollar and increased promotional activity in a highly competitive market.
Meanwhile, the company said its cost-cutting initiatives were yielding results.
A reduction in the number of employees in both head office and field operations, in conjunction with a reduction in the number of store locations, had resulted in wage and benefit savings of about $2 million in the first quarter and now are expected to exceed earlier projected annualized wage and benefit savings of $6 million.
Additional savings have been achieved through improved cost management in non-wage areas, the company said.
During the quarter, Reitmans opened three new stores and closed 19. As of May 3, there were 862 stores in operation consisting of 345 Reitmans, 146 Penningtons, 102 Addition Elle, 77 RW & CO., 68 Thyme Maternity and 124 Smart Set. The company also operates 23 Thyme Maternity shop-in-shop boutiques in select Babies”R”Us locations in Canada. The company also operated 67 Thyme Maternity shop-in-shop boutiques in the United States, which were closed on June 2.