The U.S. retailer reported that its turnover for the fourth quarter ended Jan. 31 grew by 1.3 percent to $55.5 million, with a 3.6 percent increase in comparable store sales. The gross profit margin fell, however, dropping by 4.0 percentage points to 31.4 percent.
Bakers Footwear Group’s operating income for the quarter plunged by 83.3 percent to $1.3 million. Net income also fell significantly, down by 93.2 percent to $0.5 million. Both figures include a $4.8 million gain from the early termination of an operating lease.
For the full year, Bakers, a 240-door chain of moderately priced women’s footwear, suffered a 1.4 percent drop in sales to $183.7 million. Comparable store sales inched up by 0.5 percent. The gross profit margin grew by 2.0 percentage points to 27.5 percent. The annual operating loss of $11.8 million was slightly better than the operating loss of $15.4 million suffered in the previous year, while the net loss was $15.0 versus a loss of $17.7 million.
The management was optimistic about 2009, noting that for the first 10 weeks of this fiscal year sales were up by 5.9 percent on a 7.5 percent increase in comparable store sales. Bakers pointed to open-toe shoes as a particularly strong seller. It did say, however, that results from the fourth quarter were worse than expected because of the highly promotional retail environment during the holiday sales period, though the promotions did help Bakers clear out inventory to start the spring selling season in a good position.
The company’s auditors issued a report on the Bakers’ financial statements questioning the company’s ability to continue as a going concern. However, Bakers strongly disagreed with this finding and insisted that sales will continue to grow through 2009. It pointed out that Bank of America had amended its revolving credit agreement, extending its expiration date to January 2011 from August 2010. It also reduced the overall facility by $10 million to $30 million and increased the interest rate and unused line fee. Bakers said that this action was an expression of confidence by the bank.