Hanover losses improve

Edgewater, NJ—Though multititle cataloger Hanover Direct (Amex: HNV) is still losing money, it has managed to reduce its losses considerably. For the 52 weeks ended Dec. 29, the company reported a net loss of $5.8 million or $.08 per share, compared with a net loss of $80.8 million or $ .40 per share for fiscal 2000.

Net revenue decreased 12% to $532.2 million from $603.0 million for the comparable period in 2000. The sale of the Improvements business on June 29, 2001, accounted for $27.6 million of the reduction in revenue. The discontinuance of the Domestications Kitchen & Garden, Encore, Kitchen & Home, and Turiya catalogs contributed $21.2 million to the reduction in net revenues in 2001. The company’s Internet revenue for 2001 reached $81.8 million, an increase of approximately 30% over 2000.

The balance of the revenue decrease can be attributed to softness in both the International Male and Gump’s brands, a scale-back of certain unprofitable third-party fulfillment business, and a 53-week year in fiscal 2000 compared to a 52-week year in fiscal 2001. Net revenue in 2001 for the company’s core catalog brands, The Company Store, Domestications, and Silhouettes, increased by approximately 1% over the prior year.

Overall, Hanover credits the $75.0 million improvement to decreased general and administrative expenses; gain on sale of the Improvements business; decreased cost of sales and operating expenses; gain on sale of the Kindig Lane Property in Hanover, PA; decreased special charges related to the company’s strategic business realignment program; and a reduction in interest expense.

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