Retail Ventures sees profit on accounting change
By Staff -- Home Textiles Today, 9/14/2007 11:39:00 AM
Columbus, Ohio – Off-price retailer Retail Ventures reported a dramatic leap in second-quarter profit to $106.2 million, up a loss of $16.0 million for the same period last year.
However, the gain was attributable to an accounting change from a “change in fair value of derivative instruments” and “hedging activities” -- not to retail operations. The change in value is recognized as earnings, the company said in its SEC filing.
The 383-unit retailer recorded income “related to the change in fair value of warrants” of $99.5 million for the quarter, as well as a charge, or loss, of $15.3 million. For the first half of the year, the yield was: income of $97.4 million and a charge of $80.2 million. Thus for the six months, the net gain to the balance sheet is smaller than for the quarter.
Sales of $732.7 million were up 7.0% from $684.5 million; comps rose 0.3%. Comp sales at upscale Filene’s Basement were up 7.0%, while the lagging discount operation Value City saw a 7.3% comp decline – which the company said was “comprised of declines in all major categories.”
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