The Spiegel Group, hit by plummeting finance revenue and weak sales, reported a third-quarter loss of $12.3 million, a far cry from earnings of $13.5 million last year at this time.
Revenue fell by 13% to $703.8 million. A 22% drop in catalogs sales, to $248 million, was only partially offset by a 42% increase in e-commerce revenue to $69.5 million. Retail store sales declined by 7%.
The Downers Grove, IL-based firm blamed the results on both the economy and the events of Sept. 11.
“Consumer spending has clearly been affected by these events, adding further stress to an already uncertain retail environment,” said James R. Cannataro, chief financial officer of Spiegel Group, in a statement. “Our third-quarter results reflect sales weakness in each of our merchant companies as well as higher charge-offs in our credit operations.”
The firm, which operates the Spiegel, Eddie Bauer and Newport News businesses, reported a 67% decline, a $29.2 million hit, in its private label credit card business. It also suffered a 13% drop totaling $7.5 million, in bankcard revenue.
This has prompted Spiegel Group to seek “merchandise strategies aimed at improving sales productivity and reducing the reliance on credit marketing programs to drive sales,” said Martin Zaepfel, CEO, in a statement.
The firm’s credit card bank, First Consumers National Bank, extended its grace period for consumers for assessing finance charges and fees.
The retail decline reflected a 15% drop in Eddie Bauer’s comparable store sales. Overall, Bauer posted sales of $325 million, a 7% drop compared with the same period last year.
The Spiegel unit suffered a 19% drop in sales to $152 million. Newport News experienced an 8% decline, to $96 million.
