<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
-----------------------
For the Quarter Ended Commission File No. 1-6695
- - --------------------- --------------------------
July 30, 1994
FABRI-CENTERS OF AMERICA, INC.
------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 34-0720629
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5555 Darrow Road
Hudson, Ohio 44236
- - ---------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
216 - 656 - 2600
- - -------------------------------
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares of Common Stock outstanding at August 27, 1994: 9,135,252.
Sequential page 1 of 16
<PAGE> 2
<TABLE>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Fabri-Centers of America, Inc.
(Thousands of dollars)
<CAPTION>
July 30, January 29,
1994 1994
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash $ 6,082 $ 7,715
Merchandise inventories 239,406 224,803
Prepaid expenses and other current assets 9,045 11,009
Deferred income taxes 7,936 4,123
----------------------------------
Total current assets 262,469 247,650
Property and equipment, at cost:
Land 1,966 1,966
Buildings 20,238 20,052
Furniture and fixtures 74,564 72,088
Leasehold improvements 27,842 26,195
----------------------------------
124,610 120,301
Less accumulated depreciation and amortization 49,963 44,668
----------------------------------
74,647 75,633
Mortgage receivable 7,802 7,926
Other assets 8,620 9,164
----------------------------------
Total assets $ 353,538 $ 340,373
==================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 77,384 $ 62,309
Accrued expenses 9,525 11,375
Accrued income taxes - 2,954
Net liabilities of discontinued operation - 3,557
----------------------------------
Total current liabilities 86,909 80,195
Long-term debt 57,900 45,500
Convertible subordinated debentures 56,983 56,983
Deferred income taxes 8,499 8,499
Other long-term liabilities 97 184
Shareholders' equity:
Common stock 979 975
Additional paid-in capital 71,129 70,598
Other (1,710) (1,896)
Retained earnings 81,147 87,602
----------------------------------
151,545 157,279
Treasury stock, at cost (8,395) (8,267)
----------------------------------
Total shareholders' equity 143,150 149,012
----------------------------------
Total liabilities and shareholders' equity $ 353,538 $ 340,373
==================================
<FN>
See notes to consolidated financial statements
</TABLE>
Page 2 of 16
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Fabri-Centers of America, Inc.
(Thousands of dollars, except share and per share data)
<CAPTION>
Thirteen weeks ended Twenty-six weeks ended
----------------------------- ------------------------------
July 30, July 31, July 30, July 31,
1994 1993 1994 1993
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 112,851 $ 113,151 $ 245,527 $ 252,902
Costs and expenses:
Cost of goods sold 63,968 64,877 140,392 148,677
Selling, general and administrative expenses 55,680 55,442 112,390 112,753
Interest expense, net 1,657 1,525 3,241 2,859
-------------------------------------------------------------------
121,305 121,844 256,023 264,289
-------------------------------------------------------------------
Loss before income taxes and cumulative effect of
accounting change (8,454) (8,693) (10,496) (11,387)
Income tax benefit (3,255) (3,260) (4,041) (4,270)
-------------------------------------------------------------------
Loss before cumulative effect of accounting change (5,199) (5,433) (6,455) (7,117)
Cumulative effect of accounting change - - - 399
-------------------------------------------------------------------
Net loss $ (5,199) $ (5,433) $ (6,455) $ (6,718)
===================================================================
Loss per common share:
Loss before cumulative effect of accounting change $ (0.56) $ (0.59) $ (0.69) $ (0.76)
Cumulative effect of accounting change - - - 0.04
-------------------------------------------------------------------
Net loss $ (0.56) $ (0.59) (0.69) (0.72)
===================================================================
Average shares and equivalents outstanding 9,286,485 9,215,028 9,316,779 9,291,544
===================================================================
<FN>
See notes to consolidated financial statements
</TABLE>
Page 3 of 16
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Fabri-Centers of America, Inc.
(Thousands of dollars)
<CAPTION>
July 30, July 31,
Twenty-Six Weeks Ended 1994 1993
- - -----------------------------------------------------------------------------------
<S> <C>
Operating activities:
Net loss $ (6,455) $ (6,718)
Additions (deductions) not requiring cash:
Cumulative effect of accounting change - (399)
Cancellation of restricted stock awards - (689)
Depreciation and amortization and other noncash
expenses 6,376 5,753
Loss on disposal of fixed assets 170 451
Deferred income taxes (3,813) (3,857)
Working capital changes:
Merchandise inventories (14,603) (18,989)
Prepaid expenses and other current assets 1,964 1,245
Accounts payable 15,075 4,043
Accrued expenses (1,850) (464)
Accrued income taxes (2,954) (971)
Net liabilities of discontinued operation (3,557) (6,121)
-----------------------------
Net cash used for operating activities (9,647) (26,716)
Investing activities:
Capital expenditures (4,751) (4,380)
Mortgage receivable 124 227
Other, net 134 (61)
-----------------------------
Net cash used for investing activities (4,493) (4,214)
Financing activities:
Proceeds from long-term debt 12,400 37,300
Repayment of long-term debt - (800)
Other long-term liabilities (87) (46)
Proceeds from exercise of stock options 322 258
Repurchase of common stock (128) (3,119)
-----------------------------
Net cash provided by financing activities 12,507 33,593
Net (decrease) increase in cash (1,633) 2,663
Cash at beginning of period 7,715 6,627
-----------------------------
Cash at end of period $ 6,082 $ 9,290
=============================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 3,246 $ 3,314
Income taxes 2,615 486
<FN>
See notes to consolidated financial statements
</TABLE>
Page 4 of 16
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
FABRI-CENTERS OF AMERICA, INC.
JULY 30, 1994, JANUARY 29, 1994 AND JULY 31, 1993
1. Basis of Presentation:
The accompanying consolidated financial statements include the accounts
of Fabri-Centers of America, Inc. and its wholly owned subsidiaries (the
"Company") and have been prepared without audit, pursuant to the rules
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to those rules and regulations, although the
Company believes that the disclosures herein are adequate to make the
information not misleading. The statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year
ended January 29, 1994. The statements present the Company's Cargo
Express Stores division as a discontinued operation, accordingly, except
as noted, the statements pertain to only the Company's continuing
operations.
In the opinion of Management, the accompanying consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of results for the interim
periods.
2. Significant Accounting Policies:
A. Inventories are stated at the lower of cost determined by the
last-in, first-out (LIFO) method or market.
B. Store physical inventories are taken on a cycle basis throughout the
fiscal year, with an approximate equal percentage of stores inventoried
each fiscal quarter. Store inventories subsequent to the physical
inventory are charged at cost for shipments of merchandise to the stores
and are relieved at cost for the sale of merchandise.
C. The expenses incurred in connection with the opening of new stores are
charged to operations in the period the store is opened.
D. Earnings per share are computed based on the weighted average number of
shares and share equivalents outstanding during the fiscal period.
Page 5 of 16
<PAGE> 6
E. Depreciation of buildings, furniture and fixtures and leasehold
improvements is provided by charges to operations on a straight-line
basis over the estimated useful lives of the assets. Accelerated
methods of depreciation are used for federal income tax purposes.
F. Certain reclassifications have been made of amounts reported in fiscal
1994 in order to conform with the presentation for fiscal 1995.
G. The Company is a national specialty retailer of fabric and related
products through Company-operated retail stores. The stores sell a
wide variety of fashion and decorator fabrics, related notions,
patterns, crafts, seasonal and other merchandise.
3. Effective January 31, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." As
permitted by SFAS 109, the Company elected not to restate the financial
statements for any prior years. The effect of the change on pre-tax
earnings from continuing operations for the six months ended July 31,
1993, was not material; however, the cumulative effect of the change
increased net earnings by $399,000, or $0.04 per share, for the first half
of fiscal 1994.
4. As of January 29, 1994, the Company provided $5,201,000 net of tax
benefit, for the liquidation of its housewares division, Cargo Express
Stores (Cargo Express), primarily for the write-off of fixed assets,
estimated costs to complete the liquidation and estimated operating
losses to be incurred through completion of the liquidation. During the
first quarter of fiscal 1995, the Company completed the liquidation of
Cargo Express which did not require the recognition of any additional
gain or loss. The Company has retained two Cargo Express store
locations, which were converted to fabric and craft stores, in addition
to certain store fixtures to be used in its continuing operations. As a
result, certain leasehold improvements and fixtures of Cargo Express were
transferred to the Company at net book value during the second quarter of
fiscal 1995.
5. On August 24, 1994, the Company agreed to acquire the Cloth World
Division (Cloth World) of Brown Group Inc. for its LIFO net book value,
which at January 29, 1994 was approximately $62,000,000. The
acquisition, which is subject to approvals of the appropriate authorities
and certain other conditions, is expected to be completed by the end of
the third quarter. The Company intends to fund the acquisition through
borrowing facilities with its existing bank group. The transaction will
be accounted for as a purchase of assets, accordingly, the results of
operations of Cloth World will be included in the consolidated financial
statements of the Company subsequent to the date of acquisition. Cloth
World operates 343 stores in 26 states selling fabrics and related sewing
accessories and had net sales of $224,100,000 for the fiscal year ending
January 29, 1994.
Page 6 of 16
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except where otherwise noted, Management's Discussion and Analysis of
Financial Condition and Results of Operations pertains to the Company's
continuing operations. Assets and liabilities of Cargo Express have been
reclassified on the balance sheets as net liabilities of discontinued
operation.
On August 24, 1994, the Company agreed to acquire the Cloth World Division
(Cloth World) of Brown Group Inc. for its LIFO net book value, which at January
29, 1994 was approximately $62,000,000. The acquisition, which is subject to
approvals of the appropriate authorities and certain other conditions, is
expected to be completed by the end of the third quarter. The Company intends
to fund the acquisition through borrowing facilities with its existing bank
group. The transaction will be accounted for as a purchase of assets,
accordingly, the results of operations of Cloth World will be included in the
consolidated financial statements of the Company subsequent to the date of
acquisition. Cloth World operates 343 stores in 26 states selling fabrics and
related sewing accessories and had net sales of $224,100,000 for the fiscal
year ending January 29, 1994. Management's Discussion and Analysis of
Financial Condition and Results of Operations pertains to the Company's current
financial condition and historical operating results without consideration to
the acquisition of Cloth World unless otherwise noted.
RESULTS OF OPERATIONS
THE THIRTEEN WEEKS ENDED JULY 30, 1994 VS. JULY 31, 1993
Net sales for the second quarter of fiscal 1995 decreased 0.3%, or $0.3
million, to $112.9 million from $113.2 million in fiscal 1994. The decrease in
sales was primarily attributable to lower levels of promotional discounting in
the second quarter of fiscal 1995 as compared to the same quarter a year ago.
Comparable store sales decreased 1.1% in the second quarter against the same
quarter a year earlier.
Gross profit increased $0.6 million in the second quarter of fiscal 1995
compared to the same quarter of fiscal 1994 primarily as a result of controlled
promotions. As a percentage of net sales, fiscal 1995 second quarter gross
profit was 43.3%, an increase of 0.6 percentage points from the gross profit of
42.7% for the same quarter a year earlier.
Selling, general and administrative expenses for the second quarter of
fiscal 1995 increased $0.2 million from the same quarter a year ago. This
increase was primarily attributable to higher store-level spending directed at
improving the level of customer service, offset in part by lower costs as a
result of the implementation of new management information
Page 7 of 16
<PAGE> 8
systems. As a percentage of net sales, selling, general and administrative
expenses increased 0.3 percentage points to 49.3% from 49.0% for the second
quarter of fiscal 1994 for reasons previously discussed.
Net interest expense increased $0.1 million to $1.7 million for the second
quarter of fiscal 1995 compared to the second quarter of fiscal 1994. This
increase was primarily attributable to a higher weighted average interest rate
on bank borrowings.
The Company's effective income tax rate was 38.5% for the second quarter of
fiscal 1995 compared to 37.5% for the same period a year ago. The change in
effective tax rate was attributable to the increase in the federal corporate
tax rate from 34% to 35% as a result of the Revenue Reconciliation Act of 1993,
as well as fluctuations in the Company's state income tax rates.
The net loss in the second quarter of fiscal 1995 was $5.2 million, or $0.56
per share, which compares to the net loss of $5.4 million, or $0.59 per share,
for the same quarter a year earlier.
THE TWENTY-SIX WEEKS ENDED JULY 30, 1994 VS. JULY 31, 1993
Net sales for the first half of fiscal 1995 decreased 2.9%, or $7.4 million,
to $245.5 million from $252.9 million in fiscal 1994. The decrease in sales
was primarily attributable to lower levels of promotional discounting as
previously discussed. Comparable store sales decreased 3.0% in the first half
against the same period a year earlier.
Gross profit increased $0.9 million in the first half of fiscal 1995
compared to the same period of fiscal 1994. As a percentage of net sales,
fiscal 1995 first half gross profit was 42.8%, an increase of 1.6 percentage
points from the gross profit of 41.2% for the same period a year earlier. The
higher gross profit was the direct result of less aggressive promotional pricing
by the Company and a general easing in the discounting practices of the fabric
retailing industry.
Selling, general and administrative expenses for the first half of fiscal
1995 decreased $0.4 million from the same period a year ago. This decrease was
primarily attributable to lower costs as a result of the implementation of new
management information systems, offset in part by higher store-level spending
directed at improving the level of customer service. As a percentage of net
sales, selling, general and administrative expenses increased 1.2 percentage
points to 45.8% from 44.6% for the first half of fiscal 1994 primarily as a
result of lower sales volume in the first half of fiscal 1995 compared to the
same period in fiscal 1994.
Net interest expense increased $0.4 million to $3.2 million for the first
half of fiscal 1995
Page 8 of 16
<PAGE> 9
compared to the first half of fiscal 1994. This increase was primarily
attributable to a higher weighted average interest rate on bank borrowings.
The Company's effective income tax rate was 38.5% for the first half of
fiscal 1995 as compared to 37.5% for the same period a year ago as a result of
the change in effective tax rate previously discussed.
The net loss for the first half of fiscal 1995 was $6.5 million, or $0.69
per share, which compares to the net loss of $6.7 million, or $0.72 per share,
for the same period a year earlier. The net loss in the first half of fiscal
1994 included a one-time credit of $0.4 million, or $0.04 per share, from the
cumulative effect of adopting SFAS No. 109, "Accounting for Income Taxes."
LIQUIDITY AND CAPITAL RESOURCES
Fabri-Centers completed the first half of fiscal 1995 in sound financial
condition. At July 30, 1994, the Company had working capital of $175.6 million
compared to $167.5 million at January 29, 1994. The ratio of current assets to
current liabilities at July 30, 1994 was 3.0:1 compared to 3.1:1 at January 29,
1994.
Cash used by operations was $9.6 million for the first half of fiscal 1995
compared to $26.7 million for the first half of fiscal 1994. The improvement
is primarily the result of the Company continuing to effectively manage
inventory acquisition levels in relation to planned sales levels.
Capital expenditures were $4.8 million for the first half of fiscal 1995 as
compared to $4.4 million for the first half of fiscal 1994. These capital
expenditures have been primarily used to open 14 superstores and close 17
smaller stores. Excluding the impact of the acquisition previously discussed,
the Company expects capital expenditures to be less than $15.0 million to be
used primarily to convert approximately 40 stores to the superstore format. It
is anticipated that the capital required for these expenditures will be
financed by internally generated funds, a revolving credit facility, and other
existing lines of credit.
The Company presently has borrowing capacity up to a maximum of $140.0
million available through a $125.0 million revolving credit facility which
expires May 31, 1995, as well as through existing lines of credit. As of July
30, 1994, the Company had $57.9 million in borrowings outstanding under these
facilities. The Company anticipates renewing and increasing its borrowing
capacity to a maximum of approximately $200 million with its existing bank
group to complete the acquisition of Cloth World. The Company continues to
maintain excellent
Page 9 of 16
<PAGE> 10
vendor and banking relationships and has sufficient current resources,
including unused lines of credit, to meet the financing needs of its
operations.
The Company may purchase from time to time in the open market or in private
transactions shares of Company common stock. These shares will be used to
satisfy obligations under the Company's employee benefit plans and for other
corporate purposes. The number of shares that can be acquired pursuant to
prior authorization by the Board of Directors is 1,028,325.
In the highly competitive retail fabric business, the Company competes with
other specialty fabric and craft stores and, to a lesser extent, department
stores and mass merchants on the basis of assortment, price and convenience.
The Company has been taking steps to improve margins through revised
promotional pricing policies and better store operating procedures.
Accordingly, sales results for the first half of fiscal 1995 have been somewhat
weaker while overall gross profit in terms of dollars and as a percent to sales
has improved as the Company has not been driving sales as hard through
promotions.
The Company's business exhibits seasonality which is typical of most
retail companies, with much stronger sales in the second half of the fiscal
year than the first half of the fiscal year. In general, net earnings are the
highest during the months of September through December, when high sales
volumes normally provide significant operating leverage. Conversely, net
earnings are substantially lower during the relatively low sales volume months
of January through August. With the acquisition of Cloth World, the Company
anticipates that fiscal 1995 second half results may be significantly different
from those of the comparable period in the prior year. Although the Company
expects the second half results to trend favorably over the prior year, the
impact of the acquisition on the results of operations of the Company currently
cannot be fully determined by Management.
As of July 30, 1994, the Company operated 652 stores in 36 states, primarily
under the name Jo-Ann Fabrics, of which 510 are superstores.
Page 10 of 16
<PAGE> 11
PART II OTHER INFORMATION
Item 4. Submission of Matters to a vote of Security Holders
---------------------------------------------------
a) The Annual Meeting of Shareholders of Fabri-Centers of America, Inc.
was held June 27, 1994 for the purpose of electing three members to
the class of 1997 of the Board of Directors and considering and
voting on certain proposals as described below.
b) Ira Gumberg, Scott Cowen and Alan Rosskamm were elected to the Board
of Directors for the term expiring in 1997. Robert Norton and Alma
Zimmerman continued as Directors in the class whose term of office
expires in 1995, in which class a vacancy remains, and Samuel
Krasney, Frank Newman and Betty Rosskamm continued as Directors in
the class whose term of office expires in 1996.
c) The nominees for Directors as listed in the proxy statement were
elected with the following vote:
Votes Votes
Nominee For Withheld
------------- --------- --------
Ira Gumberg 7,777,815 227,243
Scott Cowen 7,789,192 215,866
Alan Rosskamm 7,788,907 216,151
The proposal to approve an amendment to the Company's 1990 Employees
Stock Option and Stock Appreciation Rights Plan increasing the
number of shares with respect to which options may be granted and
limiting the number of shares which may be granted to any one
individual in any single year was approved by the following vote:
Votes Votes Votes Non-
For Against Withheld Votes
--------- --------- -------- -------
4,159,061 3,101,386 14,927 729,684
The proposal to approve the adoption of the 1994 Executive Incentive
Plan was approved by the following vote:
Votes Votes Votes Non-
For Against Withheld Votes
--------- --------- -------- -------
4,147,851 3,105,439 22,084 729,684
d) Not applicable.
Page 11 of 16
<PAGE> 12
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
--------
See the Exhibit Index at sequential page 14 of this report.
b) Reports of Form 8-K
-------------------
The Company was not required to file reports on Form 8-K for the
13-week period ended July 30, 1994.
Page 12 of 16
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FABRI-CENTERS OF AMERICA, INC.
DATE: September 12, 1994 /s/ Alan Rosskamm
-----------------------
BY: Alan Rosskamm
Chairman, President and Chief
Executive Officer
/s/ Robert Norton
-----------------------
BY: Robert Norton
Vice Chairman and Chief Financial
Officer
Page 13 of 16
<PAGE> 14
FABRI-CENTERS OF AMERICA, INC.
FORM 10-Q FOR THE THIRTEEN WEEK AND TWENTY-SIX WEEK
PERIODS ENDED JULY 30, 1994
EXHIBIT INDEX
Sequential
Exhibit No. Description Page No.
----------- ----------- ----------
10 1994 Executive Incentive Plan *
11 Statement re Computation of 15
Earnings per Common Share
27 Financial Data Schedule 16
* Incorporated by reference to Exhibit A in the Registrant's definitive
proxy statement for its June 27, 1994 Annual Meeting of Shareholders
filed with the Commission on May 26, 1994.
Page 14 of 16
<PAGE> 1
<TABLE>
COMPUTATION OF EARNINGS PER COMMON SHARE Exhibit 11
Fabri-Centers of America, Inc.
(Thousands of dollars, except share and per share data)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
------------------------- -----------------------------
July 30, July 31, July 30, July 31,
1994 1993 1994 1993
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE:
Loss before cumulative effect of accounting change $ (5,199) $ (5,433) $ (6,455) $ (7,117)
Cumulative effect of accounting change - - - 399
------------ ------------ ------------ ------------
Net loss $ (5,199) $ (5,433) $ (6,455) $ (6,718)
============ ============ ============ ============
Weighted average shares of common stock outstanding during the period 9,130,324 9,039,439 9,124,610 9,099,274
Incremental shares from assumed exercise of stock options (primary) 156,161 175,589 192,169 192,270
------------ ------------ ------------ ------------
9,286,485 9,215,028 9,316,779 9,291,544
============ ============ ============ ============
Primary earnings (loss) per common share:
Loss before cumulative effect of accounting change $ (0.56) $ (0.59) $ (0.69) $ (0.76)
Cumulative effect of accounting change - - - 0.04
------------ ------------ ------------ ------------
Net loss $ (0.56) $ (0.59) $ (0.69) $ (0.72)
============ ============ ============ ============
FULLY DILUTED EARNINGS PER SHARE:
Loss before cumulative effect of accounting change $ (5,199) $ (5,433) $ (6,455) $ (7,117)
Interest expense applicable to 6 1/4% convertible subordinated debentures,
net of tax 548 556 1,095 1,113
------------ ------------ ------------ ------------
(4,651) (4,877) (5,360) (6,004)
Cumulative effect of accounting change - - - 399
------------ ------------ ------------ ------------
Net loss $ (4,651) $ (4,877) $ (5,360) $ (5,605)
============ ============ ============ ============
Weighted average shares of common stock outstanding during the period 9,130,324 9,039,439 9,124,610 9,099,274
Incremental shares from assumed exercise of stock options (fully diluted) 158,136 196,996 194,961 172,031
Incremental shares from assumed conversion of 6 1/4% convertible
subordinated debentures 1,168,882 1,168,882 1,168,882 1,168,882
------------ ------------ ------------ ------------
10,457,342 10,405,317 10,488,453 10,440,187
============ ============ ============ ============
Fully diluted earnings (loss) per common share:
Loss before cumulative effect of accounting change $ (0.44) $ (0.47) $ (0.51) $ (0.58)
Cumulative effect of accounting change - - - 0.04
------------ ------------ ------------ ------------
Net loss $ (0.44) $ (0.47) $ (0.51) $ (0.54)
============ ============ ============ ============
<FN>
Note: This calculation is submitted in accordance with Regulation S-K Item 601(b)(11) although it is contrary to
paragraph 40 of APB Opinion No. 15 because it produces an anti-dilutive result.
</TABLE>
Page 15 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the July
30, 1994 consolidated balance sheet and the consolidated income statement for
the twenty-six weeks ended July 30, 1994 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-29-1994
<PERIOD-END> JUL-30-1994
<CASH> 6,082
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 239,406
<CURRENT-ASSETS> 262,469
<PP&E> 124,610
<DEPRECIATION> 49,963
<TOTAL-ASSETS> 353,538
<CURRENT-LIABILITIES> 86,909
<BONDS> 114,883
<COMMON> 979
0
0
<OTHER-SE> 142,171
<TOTAL-LIABILITY-AND-EQUITY> 353,538
<SALES> 245,527
<TOTAL-REVENUES> 245,527
<CGS> 140,392
<TOTAL-COSTS> 140,392
<OTHER-EXPENSES> 112,390
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,241
<INCOME-PRETAX> (10,496)
<INCOME-TAX> (4,041)
<INCOME-CONTINUING> (6,455)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,455)
<EPS-PRIMARY> (0.69)
<EPS-DILUTED> (0.51)
</TABLE>
