After a US$ 24.4 million loss in the fourth quarter ended 1 February 1997, Sunglass Hut International“s chief executive Jack Chadsey said last week that the US company has begun implementing a strate…
After a US$ 24.4 million loss in the fourth quarter ended 1 February 1997, Sunglass Hut International“s chief executive Jack Chadsey said last week that the US company has begun implementing a strategy to return to its highly profitable days. Sales for the quarter rose from a 1996 figure of US$ 106.6 to US$ 124.90 but a 1996 net income of US$ 4.9 million turned into a US$ 24.40 loss. For the whole year to 1 February, sales totalled US$ 527.1 million (US$ 413.6 million previously), for a loss of US$ 0.225 million compared to a year-earlier profit of US$ 28.4 million. “The issues that plagued us last year, lack of new product, are behind us,” Chadsey said. “We are gearing our organisation to handle the needs of our future.” Chadsey intends closing unprofitable stores, adding new styles to motivate consumers, and separating management teams for the Sunglass Hut stores and Watch Station, the watch retailing division the company launched last year. Sunglass Hut will close 90 of its 1,639 Sunglass Hut stores in the United States and Canada, and 30 of its 244 stores abroad. And of its 153 leased sections inside department stores, 30 will be scaled down into self-service racks with less expensive sunglasses. The stores that will close account for 3% of total sales, Chadsey said. The company will also spend more in advertising this year. But, says Sunglass Hut, the key element in the new strategy will be adding new sunglass styles to its stores.