The store closures are part of Bombay's store rationalization strategy, according to Chairman and CEO James D. Carreker. The strategy was implemented to improve operations at the chain, which has experienced decreased same-store sales and loss of revenue.
During the first quarter, same-store sales declined 1.2%, while revenue fell to $118.7 million from $122.1 million for the same period last year. The chain's net loss for the quarter nearly doubled to $15.6 million, or 43 cents per share, compared to a net loss of $8 million, or 22 cents per share, for the same period last year.
Moreover, gross margin declined 180 basis points because of increased clearance items, while the percentage of selling, general and administrative expenses as revenue increased 33.5% compared to 32.8% for the same period last year.
Carreker acknowledged the company's poor performance during an earnings conference call, attributing it to a "challenging" environment for the home furnishing industry. However, he says that the chain is kicking off the second quarter with an improved inventory assortment.
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