Jo-Ann Stores trims inventory, plans licensed fabric intro
By Staff -- Home Textiles Today, 5/16/2006 1:08:00 PM
Hudson, Ohio – Jo-Ann Stores is attempting to repair practically all aspects of its floundering fabric and craft retailing business with hopes of seeing a positive turnaround starting in the second half of the year. For the first quarter, the company reported a net loss of $6.6 million, worse than the loss of $4.2 million a year ago. Sales rose 1.0% to $424.7 million, while comps dropped 3.9%.
The inventory reduction initiative is ahead of schedule, said president and ceo Alan Rosskamm – who is holding his post only until his replacement can be found. "Although our inventory levels are still up $18 million from the end of the first quarter of last year, we have reduced inventories by $34 million since the end of fiscal 2006."
Also down is debt, which decreased by $13 million since the end of the fiscal year. And to the company’s surprise, at the end of the first quarter borrowing availability reached $182 million, "substantially higher than we had anticipated," Rosskamm said.
Stores in the 826-unit chain are remerchandising the space opened up by down-trending finished seasonal and home décor categories with expanded assortments of craft components, including up-trending categories like jewelry and kids’ crafts. Jo-Ann Stores is increasing the space of its craft area by approximately 20%.
In June bigger news will break, when Jo-Ann unveils a new line of home decorative fabrics, trims and educational materials under an exclusive licensing partnership with a "well-known television personality," Rosskamm said. A formal announcement with more details will be released "very soon," he said. "By the end of the second quarter, our stores will be full of fresh and exciting merchandise to inspire our customers."
The ultimate goal for Jo-Ann, Rosskamm said: "To transform the Jo-Ann brand by enhancing our No. 1 position in sewing while establishing our credibility as a true authority in crafting as well."
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