Hard times continue for catalogue showroom companies.
Earnings figures released yesterday by W. Bell & Co. Inc. and Best Products Co. Inc. show that both retailers still struggling to regain profitability in the increasingly competitive retail environment.
Bell reported a loss of $8 million ($2.65 a share) for the year that ended June 27 -- nearly four times the $2.2 million (71 cents) loss recorded the previous year, when Bell reported its first loss since it was founded in 1950.
More than two-thirds of the most recent loss stemmed from Bell's decision to close its five stores in Houston, which had become unprofitable after the downturn in the oil industry.
But even without the Houston stores, sales continued to decline at Bell stores, with volume at outlets stores in Washington, Baltimore and Chicago totaling $119 million, compared with the $123 million rung up in those cities a year earlier.
Meanwhile, Best continued to report a loss for its latest quarter -- $3.2 million (12 cents share) for the 13 weeks that ended Aug. 1. However, that loss was substantially less than the the $5.7 million loss (21 cents) posted for the same period a year ago. For the six months that ended Aug. 1, Best lost $9.6 million (35 cents), down from a $15 million loss (56 cents) for the same period a year earlier.
Best's improvements in part reflect a decision a year ago to close 17 unprofitable showrooms and its discount women's apparel chain, Ashby's Ltd. With those costs behind it -- and with increased sales and tighter expense controls -- Best was able to improve its operating results by 40 percent, Chairman Robert E.R. Huntley said yesterday.
For the latest quarter, sales were up 4 percent to $428.2 million from $411.6 million a year ago. A sluggish February, however, hurt sales. For the first six months of the year, sales were down 0.2 percent, to $823.1 million from $824.8 million.
"Best's figures are better than I expected," said Kenneth M. Gassman Jr., a financial analyst with Wheat, First Securities who closely follows the catalogue showroom industry. "It looks like their strategy may be working. But it's still a wait-and-see situation," he said.
Bell's future, "is more unclear at this point," he added. "It has the least well-defined strategy" of the showroom companies.
Once the star of discount retailing, catalogue showrooms have suffered in the past few years as they faced increased competition not just from other discounters but from department stores as well.
To meet increased competition, catalogue showrooms have closed unprofitable stores and radically trimmed their catalogues, reducing the number of items they carry. In the case of Best, the company's 1987 catalogue has been reduced to 325 pages, containing 5,900 items, compared with the 437-page 1986 catalogue with 8,000 items. Similarly, Bell's catalogue has dropped from 426 pages in 1986, with 6,500 items, to 296 pages and 4,000 items this year.
At the same time, some showrooms have introduced more self-service to reduce consumer complaints about long waits for merchandise.
Bell now is experimenting with other sales techniques. For the first time, it held special warehouse sales at its distribution center in Savage, Md., last summer. It also held a special garage sale in the parking lot of its Tysons Corner store.
This fall, the chain plans to rent rooms in two local hotels to sponsor a jewelry show. It also plans to hold a special electronics show this October on the Montgomery County Fairgrounds. Some of the merchandise sold at these shows will be from the company's current catalogue, while some of the goods will be items from past catalogues that the company no longer promotes.