New CEO for Delia’s amid ‘disappointing’ Q1 results
NEW YORK — Multichannel retailer Delia’s credited exiting brand Alloy and unseasonably cool weather for the dip in its first quarter results for the period ended May 4. Amid the “disappointing” first quarter results, the company has appointed a new CEO.
The company reported total revenue of $35 million, a decrease of 15% from $41 million in the first quarter of fiscal 2012. Revenue from the retail segment was $24.7 million, a decrease of 14% from the same period last year, which included a comparable store sales decrease of 7% as well as an 8% reduction in store count. Revenue from the direct segment decreased 15.3% to $10.5 million for the quarter.
Delia’s consolidated gross margin was 23.8%, a decrease of nearly 33% from 32% in the prior year quarter, primarily due to increased inventory reserves, as well as lower merchandise margins in the retail segment.
The company relocated one store location and closed one store location during the first quarter, and ended the quarter with 103 stores.
“We were disappointed with our first quarter performance, which we believe was the result of product offerings that did not align with our customers’ preferences coupled with a challenging retail environment underpinned by unseasonable weather,” said CEO Walter Killough. “We have taken aggressive action to work through our current inventory and began to make adjustments to our product offerings which have already yielded improved results. With the potential disposition of Alloy, we are currently evaluating our cost structure in order to right-size the business.”
The company has brought in Tracy Gardner as its new CEO, effective June 5. Gardner joined the Delia’s earlier in the month as COO. Killough will remain with the company as COO under his existing agreement.
“I am excited about the opportunity to create a long term vision for the Delia’s brand. While developing and executing a strategic plan will take time, I look forward to working with the team to build Delia’s into the brand we all know it can be,” said Gardner.