Reitmans sales slightly up in 2017, seeks long term growth

By

Jennifer Braun

Published
Apr 5, 2018

Reitmans announced a sales jump for its latest fiscal year, while it continued to close underperforming stores, but still suffered a net loss year-over-year due to its decision to close Hyba retail locations.

 
The Canadian retailer reported sales of $964 million for the fiscal year ended February 3, 2018, up $12 million or 1.3 percent. E-commerce sales soared the most, increasing 38.2 percent. Same store sales increased 2.9 percent with stores sales decreasing 0.7 percent.
 
During the period, the owner of more than 600 clothing stores across six different banners such as Penningtons and Addition Elle, closed 35 stores.

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For the fourth quarter of fiscal 2018, sales were again up 6 percent reaching $263.4 million. Same store sales increased 3.2 percent with store sales decreasing 1.1 percent and e-commerce sales increasing 34.3 percent.
 
Still, the company suffered a net loss for fiscal 2018 of $16.3 million ($0.26 basic and diluted loss per share) as compared with $10.9 million net earnings for fiscal 2017, due to a non-tax deductible goodwill impairment expense of $26.3 million and $3.5 million of expenses, after tax, associated with its decision to close Hyba stores.
 
Gross profit for fiscal 2018 increased $1.5 million or 0.3 percent to $523.9 million as compared with $522.4 million for fiscal 2017. 
 
The company announced plans last month to close its Hyba retail locations, its affordable activewear line, across Canada. Hyba retail store sales represent less than 2 percent of the company's total annual sales.
 
“Management is confident in the long-term growth potential of the Hyba brand and has determined that the optimum strategy is to continue to offer Hyba-branded products across Canada through the Company's 270 Reitmans store locations, as well as e-commerce through the Reitmans website," the company said at the time, in a news statement.
 
Nonetheless, Reitmans appears to be navigating the retail landscape well. After years of falling same-store sales, the company has seen sales jump since 2016, following its decision to close stores. Its decision to close Hyba retail locations will surely be another key move to improve margins.
 
The womenswear specialty apparel retailer currently operates 642 stores consisting of 270 Reitmans, 122 Penningtons, 90 Addition Elle, 80 RW&CO, 63 Thyme Maternity and 17 Hyba.