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Bombay Takes a Beating

FT. WORTH, TX-The retailer is trying an off-mall strategy to fight its sales malaise.

By Dees Stribling | Updated on March 23, 2005

FT. WORTH, TX-The Bombay Co. Inc., a purveyor of home furnishings and furniture, saw drops in both comp-store sales and earnings for both its fourth quarter and fiscal 2004, which ended Jan. 29. Comp-store sales in Q4 were down 7% compared with a year ago, and comps for 2004 sank 12% compared with 2003. The company posted earnings for the fourth quarter of $7.1 million, down from $12.3 million a year earlier. For the entire fiscal year, Bombay lost $12.8 million, compared to earnings of $9.3 million in fiscal ’03.

“We began 2004 knowing we had a challenge, and we clearly underestimated the difficulties ahead, and the softness of the environment that we would experience in quarters three and four,” said James D. Carreker, Bombay chairman CEO, during Wednesday’s earnings conference call. “In terms of earnings, there were two things that we didn’t anticipate: new accounting for leases, and store impairments that were higher than normal.”

In an effort to combat these difficulties, Bombay went ahead in 2004 with a major shift in location-emphasis for its stores. “We’ve successfully moved to a much higher percentage of off-mall locations, which have significantly lower fixed operating costs per sf,” Carreker noted. “Currently, almost 40% of our stores are in off-mall locations compared to only 12% two years ago. All of these investments position us well for future profit on sales.”

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