Net sales also fell, by 0.9%, to $573.3 million, and Linens reported a $5.9 million net loss for the quarter. "We are clearly disappointed that we have not been able to generate a stronger sales performance for the first half of the year," said Jack Moore, the company's president and COO, during a conference call.
The product transition hurt the delivery of new product, decreased guest traffic and impacted other parts of the business. Executives say they expect a turnaround for the second half of the year, though rising fuel costs could put a damper on the improvement.
Last week's hiring of Jane Gilmartin, a former executive at Ross Stores, as chief merchandising officer could shift the retailer in a positive direction, executives said. An increased merchandising assortment, a new market program focusing of direct mailing and publication insertions, improving the availability of core items and other factors could also spur growth.
During the quarter Linens opened 17 stores, bringing its total to 516. This quarter, executives are planning 10, followed by 14 during the fourth quarter, brining the year's new units to 50. Officials did not say how many stores they plan to open next year but acknowledged that they would likely slow Linens' store growth.
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