Barneys' Frugality Spurs Profitability

Barneys New York Inc. reported a 1.7 percent decline in sales and a 1.4 percent decline in same-store sales for the first quarter ended May 4, 2002.

But the company said those sales figures were “better than expected.” Also, selling, general and administrative expenses declined to 41.4 percent of sales — from 42.8 percent a year ago — primarily due to the fashion retailer's on-going expense-reduction programs. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) improved 37 percent. And the company showed a net income of $0.5 million compared with a net loss of $3.3 million a year ago.

“We are particularly pleased with the 37 percent increase in EBITDA achieved in the first quarter,” said president and ceo Howard Socol. “During the period, our effective inventory management and better-than-expected sales performance resulted in an improvement in our inventory turns and a reduction in our stock levels. As a result, we entered the second quarter with our inventory levels in good shape and in a strong position to maximize both our gross margins and the flow of new merchandise.

“We continue to be encouraged by an improving sales trend,” Socol added. “Given the strength of our gross margins and our on-going expense reduction initiatives, we believe we are well positioned for improved financial results in the months to follow.”