The Walking Company, which was acquired by Big Dog Holdings in March 2004 because of its financial problems, enjoyed a 57.6 percent increase in net income to $854,000 in the 2nd quarter. The 77-store American footwear retail chain raised its sales by 19.8 percent to $21.5 million, mainly due to an extraordinary 18.3 percent increase in comparable store sales that has largely triggered by improved inventory levels and merchandise selection.
The gross margin rose by 130 basis points to 51.8 percent. Internet and catalog sales increased by $100,000. The leverage from the increased sales allowed the Walking Company to lower its fixed costs. Sales, distribution and marketing expenses thus represented only 39.5 percent of revenues as compared to 41.4 percent in the year-ago period.
Meanwhile, Big Dog Holdings has completed the purchase of the assets of Footworks, a division of the privately held shoe retailer, Bianca of Nevada, for $10.09 million in addition to roughly $6 million in earn-outs based on future performance. The acquisition is being funded by cash and debt. Included in Footworks’ takeover is a chain of seven retail stores selling comfort shoes and accessories, and The Walking Company plans on turning a majority of the stores into The Walking Company Stores.
Together with its other businesses, Big Dog reached revenues of $43.4 million, a 6.0 percent increase. Net profit for the group rose by 7.1 percent to $24.7 million. Operating expenses as a percentage of sales decreased from 50.7 percent in the same period last year to 49.8 percent, and stood at $21.6 million.