"We definitely will be closing a decent-sized number of stores," said Robert J. Higgins, chairman and CEO. "We pretty much know what we're going to do, and will take action."
Some, he added, will be former Musicland units. The company acquired Musicland Holding Corp. and Musicland's 400 stores last year, and it was expected that up to 65 of those stores would be closed.
The chain also will roll out a test of its "Mix and Burn" strategy to 25 stores, including a number in Providence, RI, at the end of January. Shoppers will be able to purchase music and either burn it onto a CD or download it onto a compatible MP3 player. If successful, the program will be expanded. The chain also plans to expand its sales of small electronics, which posted positive comps during the holidays, though music and DVDs did not.
"We still feel that there is a lot of opportunity for us as the last one standing in the specialty retailing business," Higgins said. "We are still positive about where we can take this company."
The company posted sales of $348 million for the five weeks ended Dec. 30, 2006, up 23% from the previous year. Sales for the nine weeks ended Dec. 30 were $469 million, also up 23%. But comp-store sales dropped 6% for the five-week period and 5% for the nine-week holiday selling season.
Trans World operated 1,113 stores this year in the United States, the District of Columbia, the U.S. Virgin Islands, and Puerto Rico compared to 798 stores last year. The company is consolidating the majority of its stores (Coconuts Music and Movies, Strawberries Music, Wherehouse, Sam Goody and Spec's) under the name f.y.e. for your entertainment. The company also operates more than 180 video-only stores, primarily under the Suncoast brand.
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