Sales Up but No Profits at Zany, Noodle

-- Publishers Weekly, 8/30/1999

Zany Brainy and Noodle Kidoodle, two of the country's largest children's multimedia chains, both reported higher sales for the second quarter ended July 31, 1999, although neither retailer turned a profit in the period.

Zany Brainy, which went public in early June (News, June 14), had a 49% sales gain to $44.1 million in the quarter and cut its net loss from $4.3 million to $2.2 million. Same-store sales were up 8% in the period. Zany Brainy chairman Keith Spurgeon said the revenue gain was led by strong sales in such areas as trains, learning games, electronics and books. During the quarter, the company moved its distribution center and headquarters, while also opening nine new outlets. The retailer also used some proceeds from its IPO toward the development of an e-commerce shopping site that the company expects to have working by the holidays.

In the first half of fiscal 2000, Zany's sales were ahead 48% to $84.7 million, and the net loss was cut to $3.5 million from $6.7 million.

Noodle Kidoodle had a 13% gain in second-quarter sales to $20.8 million and a net loss of $3.3 million. Earlier this month, the company warned analysts that it would have a bigger loss than expected and that comparable-store sales would be down 9%-10% (News, Aug. 9); same-store sales actually fell 8%. During the quarter, Noodle Kidoodle opened four new stores, and in August began work on its 55th store, located in Nashua, N.H. The company also said that it expects its enhanced Web site to be ready for the holiday season.

For the first six months of the year, Noodle Kidoodle's sales were up 20% to $43.7 million, and the net loss increased to $4.7 million from $2.6 million.