This is What Happens after PE Firms Get Through with a Retailer

[marmar]

This is What Happens after PE Firms Get Through with a Retailer
by Wolf Richter • January 8, 2016


[font color="blue"]At least, they didn’t blame China.[/font]

Thursday afterhours, the Container Store, former LBO queen and IPO hero with 77 stores around the country, reported third quarter “earnings” – in quotes because those “earnings” were negative.

Consolidated net sales for the quarter ending November 30 rose 3.3% to $197.2 million. But cost of sales rose 5.3%. CEO Kip Tindell blamed their new “$75 free-shipping service.” It’s “driving sales” and is “absolutely a good thing, but of course it’s a headwind to gross margin,” he said. That’s how Amazon leaves its mark.

Selling, general, and administrative expenses jumped 8.6%. “Disappointing,” Tindell called it. CFO Jodi Taylor blamed the “complexity of our transformational TCS Closets initiative,” plus higher payroll, healthcare, and storage expenses. Stuff happens in real life.

Stock-based compensation, pre-opening costs, and depreciation and amortization also rose. So income from operations plunged 87% to $1.8 million. And after $4.2 million in interest expense and a tax benefit of $694,000, there was a net loss of $1.7 million. It brought the net loss for the nine months to $4.3 million. ...............(more)

http://wolfstreet.com/2016/01/08/this-is-what-happens-after-pe-firms-get-through-with-a-retailer/

[msongs]

1. borrow $ on them, take the $$ and run, and dump the corpse on the taxpayer. American business nt

[dixiegrrrrl]

2. Exactly how the mafia did it to Mom and Pop stores for years in cities.

Exact same model.