Merry-Go-Round losses continue

June 10, 1994|By Jay Hancock | Jay Hancock,Sun Staff Writer

Three months of poor sales hit the bottom line with a thud yesterday at Merry-Go-Round Enterprises Inc., as the Joppa-based apparel chain reported a $24.1 million loss for its latest quarter.

Merry-Go-Round, which entered bankruptcy proceedings in January, has reported sharp monthly sales declines since last year.

The company blames a lack of merchandise, saying problems with vendors several months ago hurt its ability to buy clothes.

For Merry-Go-Round's first quarter, which ended April 30, sales in stores open for at least a year were down 26 percent.

"They have no spring merchandise in the stores. That's the problem," said Peter A. Chapman, head of Bankruptcy Creditors' Service Inc. in Princeton, N.J.

The first-quarter results were slightly worse than expected, analysts said, but they pose no imminent danger to existence of the company, which was sitting on $100 million in cash as of April 2.

Store-closing costs, lawyers' fees and other reorganization costs amounting to $7.0 million exaggerated the loss.

Merry-Go-Round managers say they do not expect a sharp improvement in results until mid-summer, when the stores will obtain back-to-school merchandise.

The first-quarter loss amounted to 45 cents a share. During last year's first quarter, Merry-Go-Round earned $2.0 million, or 4 cents a share.

Total sales for the latest quarter were $169 million, down 9 percent.

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