Bon-Ton Narrows FY Loss; CEO Hoffman to Exit
YORK, Pa.-The Bon-Ton Stores ended its fiscal year on Feb. 1 with a net loss for the year of $3.6 million, compared to its prior fiscal-year loss of $21.6 million.
The retailer has also announced that President and CEO Brendan Hoffman will leave his post when his employment agreement ends on Feb. 7, 2015. Hoffman will also resign as a director of the retailer at that time.
For the fourth quarter, Bon-Ton posted net income of $61.3 million, down 17.6 percent from the fourth quarter of last year. Net sales for the year totaled $2.8 billion, off 5.1 percent from the prior year and including a 4.2 percent decrease in same-store sales. In the quarter, net sales dropped 9.9 percent to $914.9 million, including a falloff of 7.3 percent in same-store sales.
Hoffman attributed the fourth-quarter drops in sales to the multiple snowstorms which hit in December and January, which brought sharp declines in traffic. He added, however, that Bon-Ton did achieve an increase in gross margin and managed to reduce expenses in the quarter.
Gross margin did increase by 24 basis points in the quarter, to 37.6 percent. Selling, general and administrative expenses were slimmed by 6 percent in dollars, although they did rise 102 basis points as a percentage of sales, to 26.5 percent.
Regarding his departure, Hoffman said he made the decision to leave "for strictly personal reasons. I remain committed to continuing to execute the strategic initiatives we put forward as the company searches for a new chief executive officer." In the statement announcing his exit, the company said it will undertake "a national search" for his successor.
Tim Grumbacher, Bon-Ton's chairman, said of Hoffman, "The initiatives he implemented and the direction he brought to the company have built the foundation for a successful future for our company."