Hanover records small profit, higher margins

By Staff -- Home Textiles Today, 5/26/2003 12:00:00 AM

EDGEWATER, NJ —

Raising $1.9 million through the sale of its Improvements business, and at the same time building margins and cutting costs, Hanover Direct Inc. returned to profitability during the first quarter, recording a small profit of $192,000, compared with a prior-year loss of $1.8 million.

Sales at the catalog retailer slipped by 6.4 percent, to $102.5 million from $109.5 million, due to a softness in demand in a weak retail environment and a 2.1 percent reduction in overall circulation as the company pared its mailing lists.

Despite the decline in sales, average gross margin widened by 100 basis points, or 1.0 percentage point, to 36.0 percent from 35.0 percent a year ago. Gross margin dollars, hurt by the decline in sales, fell by 3.7 percent, to $36.9 million from $38.3 million.

In a lift to the bottom line, costs were cut by 3.5 percent, to $35.7 million from $37.0 million last year, generating a cash savings of $1.3 million.

Hanover Direct Inc.