Crown Losses About as Expected
Jim Milliot -- Publishers Weekly, 1/4/1999
According to Crown Books' third quarter 10-Q filing with the SEC, the chain had a net loss of $6.5 million in the quarter and a loss of $45.2 million in the nine-month period. The losses were just slightly higher than those projected by the company late last month (News, Dec. 21).The filing also notes that Crown has entered into an agreement with its debtor-in-possession lenders to amend its current $40-million loan agreement. As of December 18, Crown had borrowed $27.8 million, which it used to restock its inventory, adding titles for the Christmas selling season; to offset operating losses; and to fund reorganization costs. Crown spent $1.8 million on its reorganization during the quarter. The company believes that it has enough liquidity to continue operating for the next 12 months, assuming it remains under bankruptcy protection.
Of Crown's remaining 94 outlets, 71 are superstores. As part of downsizing its operations, Crown received $7.5 million from the liquidator who sold the inventory from 38 Crown stores. The company also earned another $900,000 by conducting clearance sales in its remaining stores. Also during the quarter, Crown returned inventory from 41 of its closed stores to Ingram, for which it received book purchase credits of $11.6 million.
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