Delia’s grows sales, cuts loss

By Staff -- Home Textiles Today, 6/6/2006 11:07:00 AM

New York -- Delia’s Inc., the apparel and home accessories retailer targeting the tweener market, parlayed stronger sales, wider margins and lower costs into a sharply narrowed first-quarter loss of $1.2 million, improving on a year-ago deficit of $12.5 million when the chain was awash in red ink spilled by discontinued operations.

Helped by new store openings and a surge in catalog sales, revenues climbed higher by 16.1%, to $51.9 million from $44.7 million last year. Sales in the core direct-to-consumer business rose by 19.1%, to $37.1 million from $31.2 million last year, spurred by a 14.6% increase in catalog circulation. Sales in brick-and-mortar stores gained by 9.3%, to $14.7 million.

Stanching the flow of red ink, in addition to the stronger sales, average gross margin widened by 270 basis points, or 2.7 percentage points, to 37.9% of sales from 35.2% a year ago. In another lift, costs were pared by 100 basis points, or 1.0 percentage points, to 40.5% of sales from 41.5% last year.

Saving the company even more, stockpiles were pared by 8.1%, even as sales shot up at a double-digit pace. Inventories were whittled down to $23.7 million from $25.8 million last year, saving the retailer $2.1 million.