Zany Brainy Has Weak Qtr.
Staff -- 9/11/00
Reporting its operating results for the first time since it completed its merger with Noodle Kidoodle in July, Zany Brainy said last week that revenues for the combined company rose 10.5%, to $71.1 million, for the period ended July 29, 2000. The sales gain came despite a 9% decline in comparable store sales for the period.
A host of onetime charges associated with the merger as well as losses related to Zanybrainy.com resulted in a net loss in the quarter of $22.2 million compared to $5.5 million in last year's quarter. Excluding the extraordinary charges, Zany Brainy would have had a net loss of $7.3 million in the most recent quarter.
Keith Spurgeon, chairman and CEO of Zany Brainy, said the decline in same-store sales was expected because of several "hot products" in last year's second quarter, but he predicted that the introduction of new products will result in an improved financial performance in the second half of this year. During the first six months, Zany Brainy opened 18 new stores and expects to open nine more by year's end. The company has also begun converting Noodle Kidoodle's 60 outlets to Zany Brainy. The combination of new store openings and the rebranding of Noodle stores will give the multiple-media chain a total of 188 Zany Brainy outlets by the end of the fiscal year.
With the completion of the merger, Noodle Kidoodle chairman Stanley Greenman joined the Zany board, although he stepped down from involvement in the day-to-day running of the company, and Noodle Kidoodle president and COO Stewart Katz left the company. Greenman received a severance package of $975,000, while Katz got an $880,000 payment.
Volume 246 Issue 37 09/11/2000