Jo-Ann Goes Red

HUDSON, OH-Jo-Ann Stores Inc. ended fiscal 2006 in the red, prompting chairman and CEO Alan Rosskamm to describe the year as “difficult and disappointing” during the chain’s earnings conference call. Net loss for the year was $23 million, or $1.01 loss per diluted share, compared with net income of $46.2 million, or $2.02 per diluted share in fiscal 2005.

Net sales for fiscal 2006 increased 3.9% to $1.88 billion from $1.81 billion in fiscal 2005. Fiscal year 2006 same-store net sales decreased 0.8% versus a same-store sales increase of 3.2% in the prior year.Rosskamm said that fiscal 2005 was a record year for the chain and encouraged the management team to make decisions that negatively impacted the business.

“We were overly optimistic,” he admitted. Moreover, during the fourth quarter, the chain saw negative trends of declining traffic and softening customer demand gain momentum, Rosskamm said. Specifically, the industry experienced its worst slowdown in sewing since the 1990s, he noted.