================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 29, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period ended ________ to ________
Commission file number 33-68258
APPAREL RETAILERS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or other jurisdiction of 76-0407711
incorporation or organization) (I.R.S. Employer Identification No.)
10201 MAIN STREET, HOUSTON, TEXAS 77025
(Address of Principal Executive Offices) (Zip code)
(713) 667-5601
Registrant's telephone number, including area code
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 at least the past 90 days.
Yes [X] No [ ]
The number of shares of common stock outstanding as of September 1, 1995 was
11,486,742 shares of Common Stock and 1,468,750 shares of Class B Common Stock.
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APPAREL RETAILERS, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands, except par value and number of shares)
<TABLE>
<CAPTION>
JANUARY 28, 1995 JULY 29, 1995
---------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents .............................................................. $ 28,593 $ 16,966
Accounts receivable .................................................................... 70,356 58,347
Merchandise inventories ................................................................ 118,039 146,735
Prepaid expenses and other current assets .............................................. 18,162 26,520
--------- ---------
Total current assets ............................................................. 235,150 248,568
Property, equipment and leasehold improvements, net .................................... 75,602 87,540
Goodwill, net .......................................................................... 31,865 32,091
Other assets ........................................................................... 27,113 26,746
--------- ---------
$ 369,730 $ 394,945
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable ....................................................................... $ 38,332 $ 45,357
Accrued interest ....................................................................... 11,372 11,326
Accrued expenses and other accrued liabilities ......................................... 34,575 25,755
Accrued taxes, other than income taxes ................................................. 2,642 4,472
--------- ---------
Total current liabilities ........................................................ 86,921 86,910
--------- ---------
Long-term debt ......................................................................... 310,575 328,772
Related party debt ..................................................................... 39,200 44,200
Other long-term liabilities ............................................................ 14,227 13,360
--------- ---------
Total liabilities ................................................................ 450,923 473,242
--------- ---------
Preferred stock, par value $1.00, non-voting,
2,500 shares authorized, zero shares
issued and outstanding ............................................................... -- --
Common stock, par value $0.01, 15,000,000 shares
authorized, 11,381,141 and 11,492,646 shares
issued and outstanding, respectively ................................................. 113 115
Class B common stock, par value $0.01, non-voting,
1,500,000 shares authorized, 1,468,750 shares
issued and outstanding ............................................................... 15 15
Additional paid-in capital ............................................................. 3,565 3,800
Accumulated deficit .................................................................... (84,886) (82,227)
--------- ---------
Stockholders' deficit .................................................................. (81,193) (78,297)
--------- ---------
Commitments and contingencies .......................................................... -- --
--------- ---------
$ 369,730 $ 394,945
========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
1
<PAGE>
APPAREL RETAILERS, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(in thousands, except earnings per share)
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED, FOR THE SIX MONTHS ENDED,
-------------------------------- -------------------------------
JULY 30, 1994 JULY 29, 1995 JULY 30, 1994 JULY 29, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales .............................................. $ 132,060 $ 154,578 $ 260,133 $ 296,931
Cost of sales and related buying,
occupancy and distribution expenses .................. (92,897) (108,023) (181,114) (204,093)
--------- --------- --------- ---------
Gross profit ........................................... 39,163 46,555 79,019 92,838
Selling, general and
administrative expenses .............................. (30,189) (37,922) (60,235) (72,053)
Service charge income .................................. 1,602 2,441 3,735 5,124
--------- --------- --------- ---------
Operating income ....................................... 10,576 11,074 22,519 25,909
--------- --------- --------- ---------
Interest income ........................................ 515 111 915 271
--------- --------- --------- ---------
Interest expense:
Related party ........................................ (636) (1,117) (1,107) (2,154)
Other ................................................ (9,284) (9,315) (18,753) (18,550)
Amortization of debt issue costs ..................... (409) (480) (848) (932)
--------- --------- --------- ---------
(10,329) (10,912) (20,708) (21,636)
--------- --------- --------- ---------
Income before income tax and
extraordinary item .................................. 762 273 2,726 4,544
Income tax expense ..................................... (299) (52) (1,066) (1,885)
--------- --------- --------- ---------
Income before extraordinary item ....................... $ 463 $ 221 1,660 2,659
Extraordinary item - early
extinguishment of debt ............................... -- -- (326) --
--------- --------- --------- ---------
Net income ............................................. $ 463 $ 221 $ 1,334 $ 2,659
========= ========= ========= =========
EARNINGS PER COMMON SHARE DATA:
Earnings per common share before
extraordinary item ................................... $ 0.03 $ 0.02 $ 0.12 $ 0.20
Extraordinary item - early
extinguishment of debt ............................... -- -- (0.02) --
--------- --------- --------- ---------
Earnings per common share after
extraordinary item ................................... $ 0.03 $ 0.02 $ 0.10 $ 0.20
========= ========= ========= =========
Weighted average common shares
outstanding .......................................... 13,270 13,419 13,268 13,409
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
2
APPAREL RETAILERS, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED,
----------------------------------
JULY 30, 1994 JULY 29, 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................................. $ 1,334 $ 2,659
-------- --------
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization ........................................................ 4,757 5,721
Deferred federal income taxes ........................................................ (2,073) (490)
Accretion of discount ................................................................ 5,943 6,722
Amortization of debt issue costs ..................................................... 848 933
Issuance of long-term debt in lieu of interest payment ............................... 137 147
Loss on early extinguishment of debt ................................................. 535 --
Changes in operating assets and liabilities:
Decrease in accounts receivable .................................................... 5,924 10,809
Increase in merchandise inventories ................................................ (10,765) (28,696)
Increase in other assets ........................................................... (2,927) (8,170)
Increase in accounts receivable sold ............................................... -- 1,200
Decrease in accounts payable and accrued liabilities ............................... (239) (1,349)
-------- --------
Total adjustments ................................................................ 2,140 (13,173)
-------- --------
Net cash provided by (used in) operating activities ................................ 3,474 (10,514)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in restricted investments ..................................................... 768 --
Additions to property, equipment and leasehold improvements ............................ (6,384) (16,786)
-------- --------
Net cash used in investing activities .............................................. (5,616) (16,786)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Long-term debt ....................................................................... -- 16,458
Common stock ......................................................................... 40 64
Payments on:
Long-term debt ....................................................................... (10,326) (115)
Additions to debt issue costs ........................................................ (433) (734)
-------- --------
Net cash provided by (used in) financing activities ................................ (10,719) 15,673
-------- --------
Net decrease in cash and cash equivalents .......................................... (12,861) (11,627)
Cash and cash equivalents:
Beginning of period .................................................................. 59,315 28,593
-------- --------
End of period ........................................................................ $ 46,454 $ 16,966
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid .......................................................................... $ 15,207 $ 13,894
======== ========
Income taxes paid ...................................................................... $ 2,634 $ 5,862
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
APPAREL RETAILERS, INC.
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
(in thousands, except numbers of shares)
(unaudited)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------------
CLASS B
------------------- ADDITIONAL
SHARES SHARES PAID-IN ACCUMULATED
OUTSTANDING AMOUNT OUTSTANDING AMOUNT CAPITAL DEFICIT TOTAL
----------- ------ ----------- ------ ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 28, 1995 ........................ 11,381,141 $113 1,468,750 $15 $ 3,565 $(84,886) $(81,193)
Net income ....................................... -- -- -- -- -- 2,659 2,659
Vested compensatory stock options ................ -- -- -- -- 173 -- 173
Issuance of stock ................................ 112,105 2 -- -- 63 -- 65
Retirement of stock .............................. (600) -- -- -- (1) -- (1)
---------- ---- --------- --- ------- -------- --------
Balance, July 29, 1995 ........................... 11,492,646 $115 1,468,750 $15 $ 3,800 $(82,227) $(78,297)
========== ==== ========= === ======= ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
4
APPAREL RETAILERS, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated condensed financial
statements of Apparel Retailers, Inc. ("ARI") have been prepared in accordance
with Rule 10-01 of Regulation S-X and do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Those adjustments, which include only normal recurring
adjustments, that are, in the opinion of management, necessary for a fair
presentation of the results of the interim periods have been made. The results
of operations for such interim periods are not necessarily indicative of results
of operations for a full year. The unaudited consolidated condensed financial
statements should be read in conjunction with the audited consolidated financial
statements and notes thereto for the year ended January 28, 1995 filed with
ARI's Annual Report on Form 10-K. Certain reclassifications have been made to
prior year amounts to conform with the current year presentation. The fiscal
years discussed herein end on the Saturday nearest to January 31 in the
following calendar year. For example, references to "1995" mean the fiscal year
ended February 3, 1996.
ARI was formed in June 1993 at the direction of the stockholders of
Specialty Retailers, Inc. ("SRI") as part of an overall refinancing and
distribution plan. In connection with such plan, SRI became a wholly-owned
subsidiary of the ARI in August 1993. ARI conducts its business exclusively
through SRI. ARI has no operations of its own and its primary asset is the
common stock of SRI. ARI and SRI are collectively referred to herein as the
"Company".
2. Under the accounts receivable securitization program implemented in
1993 (the "Accounts Receivable Program"), a subsidiary of the Company, SRI
Receivables Purchase Co., Inc. ("SRPC") purchases the accounts receivable
generated under the Company's private label credit card program. Such accounts
receivable are in turn transferred to a master trust (the "Trust") which has
issued certain certificates representing undivided interests in the Trust. SRPC
owns an undivided interest in the assets of the Trust not supporting the term
certificates and the revolving certificate issued by the Trust. On August 15,
1995, the Trust increased the amount of term certificates outstanding from
$140.0 million to $165.0 million. The commitment under the revolving certificate
remained unchanged at $40.0 million. SRPC is a separate corporate entity from
the Company and SRPC's creditors have a claim on its assets prior to those
assets becoming available to any creditor of the Company.
3. The Company has a revolving credit agreement with a bank (the
"Credit Agreement") under which it may draw up to $25.0 million. On March 31,
1995, the Company extended the Credit Agreement to February 3, 1998 and entered
into a separate agreement with the bank under which it may borrow an additional
$10.0 million for seasonal working capital needs (the "Seasonal Credit
Agreement"). Funds are available under the Seasonal Credit Agreement from August
15 through January 15 of each fiscal year (the "Seasonal Period"). The Seasonal
Credit Agreement is available through February 3, 1998 and provides for a
commitment fee during each Seasonal Period of 1/2 of 1% of the average daily
unused portion of the commitment amount. Commitment fees are paid on an annual
basis on the first business day following the Seasonal Period then concluded.
Interest is charged on outstanding loans at a base rate plus a specified margin.
The base rate is the higher of the bank's prime rate or 1/2 of 1% above the
Federal Funds Effective Rate. The specified margin range is 1.25% to 2.75% based
on calculated debt service ratios as defined in the Credit Agreement.
4. During the fourth quarter of 1994, the Company approved a store
closure plan (the "Store Closure Plan") for the closure of forty Fashion Bar
stores and accrued $5.2 million for the expected costs associated with the plan.
As of July 29, 1995, the Company had closed all but one of these stores and had
charged $3.8 million to the accrual primarily related to lease termination
payments associated with these stores. The Company expects to complete the Store
Closure Plan during 1995.
5. During the second quarter of 1995, SRI issued $18.3 million in
aggregate principal amount of 11% Series C senior subordinated notes due 2003
(the "Series C Senior Subordinated Notes"). The Series C Senior Subordinated
Notes were issued at a discount of $1.8 million and bear interest at 11% payable
semi-annually on February 15 and August 15 of each year. The original issue
discount is being charged to interest expense over the term to maturity using
5
the effective interest method. The combination of coupon interest payments and
original issue discount results in an effective interest rate of 13.0%. The
Series C Senior Subordinated Notes rank junior to the 10% senior notes due 2000
(the "Senior Notes") and pari passu with the existing 11% Series B senior
subordinated notes due 2003 (the "Series B Senior Subordinated Notes", and
together with the Series C Senior Subordinated Notes, the "Senior Subordinated
Notes"). SRI is required to make a mandatory sinking fund payment on September
15, 2002 equal to forty percent of the original aggregate principal amount of
Series C Senior Subordinated Notes.
On August 22, 1995, SRI filed a registration statement with the
Securities and Exchange Commission (the "Commission") to exchange its 11% Series
D senior subordinated notes for its Series C Senior Subordinated Notes. The form
and terms of the Series D notes are the same as the form and terms of the Series
C Senior Subordinated Notes except that the Series D notes will be registered
under the Securities Act of 1933 and, therefore, will not bear legends
restricting their transfer. SRI expects to commence the exchange offer during
September 1995 once the registration statement has been declared effective by
the Commission.
6
APPAREL RETAILERS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
ARI conducts its business exclusively through SRI, which currently
operates 248 family apparel stores in thirteen states throughout the central
United States primarily under the names Bealls, Palais Royal and Stage offering
branded fashion apparel and accessories for women, men and children. ARI has no
operations of its own and its primary asset is the common stock of SRI.
During 1993, management formalized its growth strategy for expanding
the Company's business. During 1994, this growth strategy resulted in the
opening of ten new stores in Texas, Oklahoma and Missouri and the acquisition of
forty-five store leases from the Beall-Ladymon Corporation ("Beall-Ladymon"),
located primarily in Louisiana, Arkansas and Mississippi. The former
Beall-Ladymon stores reopened in the first quarter of 1995 under the name of
Stage, the banner the Company has registered nationally and intends to promote
in all new markets where its traditional names are unrecognized. These new
stores are similar in size, appearance and merchandise content to the Company's
other stores.
During the fourth quarter of 1994, management approved a plan for the
closure of forty Fashion Bar stores and accrued $5.2 million for the expected
costs associated with the plan. As of July 29, 1995, all but one of these stores
had been closed. The Company expects to complete the Store Closure Plan during
1995.
During the first six months of 1995, continued weak economic conditions
in Mexico, which have resulted in the devaluation of the peso, adversely
affected sales at six Bealls stores located near the Texas-Mexico border.
Although this may be a temporary aberration, its continued duration and
resulting impact on these and possibly other stores' sales can not be predicted
at this time.
RESULTS OF OPERATIONS
Sales for the three and six months ended July 29, 1995 were $154.6
million and $296.9 million, respectively, representing increases of 17.1% and
14.1%, respectively. These increases were primarily due to the increase in sales
generated from the overall growth in stores opened during 1994 and 1995.
Comparable store sales for the three months ended July 29, 1995 increased 0.7%
and for the six months ended July 29, 1995 were flat versus the comparable
period of the prior year. Excluding the six Bealls stores affected by the weak
economic conditions in Mexico discussed above, comparable store sales would have
increased 3.0% and 2.4% for the three and six months ended July 29, 1995,
respectively.
Gross profit as a percent of net sales for the three and six months
ended July 29, 1995 was 30.1% and 31.3%, respectively, as compared to 29.7% and
30.4% for the three and six months ended July 30, 1994, respectively. These
increases were due to favorable profit margins associated with sales at the
Company's newly opened stores combined with the application of fixed costs
related to buying, occupancy and distribution expenses to a greater volume of
sales.
Selling, general and administrative expense as a percent of net sales
for the three and six months ended July 29, 1995 was 24.5% and 24.3%,
respectively, as compared to 22.9% and 23.2% for the three and six months ended
July 30, 1994, respectively. These increases resulted from an increase in the
amortization of one-time incremental costs and fixed costs associated with the
opening of new stores combined with costs associated with the certificates
outstanding under the Accounts Receivable Program, partially offset by the
application of fixed costs to a greater volume of sales.
Service charge income for the three and six months ended July 29, 1995
was $2.4 million and $5.1 million, respectively, as compared to $1.6 million and
$3.7 million for the three and six months ended July 30, 1994,
7
respectively. Service charge income increased due to increased accounts
receivable balances resulting from higher sales volume and the purchase of
accounts receivable from Beall-Ladymon.
Interest expense for the three and six months ended July 29, 1995 was
$10.9 million and $21.6 million, respectively, compared to $10.3 million and
$20.7 million for the three and six months ended July 30, 1994, respectively.
The increases were primarily due to an increase in the accretion of discount on
the 12 3/4% senior discount debentures due 2005 (the "ARI Senior Discount
Debentures"). The increase for the six months ended July 29, 1995 was partially
offset by interest savings resulting from the retirement of $10.0 million of the
Senior Notes during the first quarter of 1994.
The extraordinary charge of $0.3 million for the six months ended July
30, 1994 was comprised of acquisition premiums and the write-off of debt issue
costs associated with the retirement of $10.0 million of Senior Notes, net of
applicable income taxes.
SEASONALITY AND INFLATION
The Company's business is seasonal and sales and profits traditionally
have been lower during the first nine months of the year (February through
October) and higher during the last three months of the year (November through
January). Working capital requirements fluctuate during the year and generally
reach their highest levels during the third and fourth quarters.
The following table shows certain unaudited financial information for
the Company by quarter (in thousands except earnings per share):
<TABLE>
<CAPTION>
1994 1995
-------------------------------------------------------- -----------------------
Q1 Q2 Q3 Q4 Q1 Q2
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales ............................ $128,073 $132,060 $134,939 $186,391 $142,353 $154,578
Gross profit ......................... 39,856 39,163 41,110 62,675 46,283 46,555
Operating income ..................... 11,943 10,576 10,029 18,409 14,835 11,074
Quarter's operating
income as a percent
of annual .......................... 23% 21% 20% 36% -- --
Income before
extraordinary item ................. $ 1,197 $ 463 $ 52 $ 4,918 $ 2,438 $ 221
Net income ........................... 871 463 90 4,898 2,438 221
Earnings per share
before extraordinary
item ............................... 0.09 0.03 -- 0.38 0.18 0.02
Earnings per share ................... 0.07 0.03 -- 0.38 0.18 0.02
</TABLE>
The Company does not believe that inflation had a material effect on
its results of operations during 1995. However, there can be no assurance that
the Company's business will not be affected by inflation in the future.
LIQUIDITY AND CAPITAL RESOURCES
ARI is a holding company that conducts business exclusively through its
wholly-owned subsidiary, SRI. As a holding company, ARI is dependent on the cash
flow of SRI and its subsidiaries in order to meet its debt service obligations
under the ARI Senior Discount Debentures. Management believes that ARI will
receive sufficient distributions from SRI to enable it to service the cash
interest payments on the ARI Senior Discount Debentures when
8
they become due; however, there can be no assurance that such distributions will
be adequate to satisfy either the cash interest on, or the repayment of such
debt. Interest and principal payments are not required on the ARI Senior
Discount Debentures until February 15, 1999 and August 15, 2005, respectively.
ARI was formed in 1993 in connection with the refinancing of certain
SRI debt. After giving effect to the refinancing and subsequent retirement of
$20.0 million of Senior Notes during 1993 and 1994, the Company's consolidated
long-term debt at July 29, 1995 was comprised of $130.0 million in aggregate
principal amount of Senior Notes, $118.3 million in aggregate principal amount
of Senior Subordinated Notes, $149.1 million in aggregate principal amount of
ARI Senior Discount Debentures and certain other debt.
During the second quarter of 1995, SRI issued $18.3 million in
aggregate principal amount of Series C Senior Subordinated Notes. Such notes
were issued at a discount of $1.8 million and bear interest at 11% payable
semi-annually on February 15 and August 15 of each year. Substantially all of
such proceeds will be used for new store openings and other general corporate
purposes.
Working capital increased $13.4 million during the first six months of
1995 primarily due to the issuance of the Series C Senior Subordinated Notes.
Significant changes within working capital components included cash, accounts
receivable and merchandise inventories. Accounts receivable decreased $12.0
million during the six months ended July 29, 1995 as a result of collections
generated from seasonal fourth quarter 1994 sales. Merchandise inventories
increased $28.7 million during the six months ended July 29, 1995 as a result of
merchandise purchased for newly opened stores and seasonal merchandise
purchases.
Under the Company's Accounts Receivable Program, the Company sells
substantially all of its private label credit card accounts receivable to the
Trust on a daily basis in exchange for cash and an undivided interest in the
Trust's assets. On August 15, 1995, the Trust increased the amount of term
certificates outstanding from $140.0 million to $165.0 million which exchanged
the ability to obtain funds under the revolving certificate for a term
certificate which bears a lower rate of return. The Company has the option to
receive payment for up to 72% of the eligible accounts receivable which exceed
the Trust's term certificates outstanding and the Company's minimum interest in
the Trust for such certificates (currently $200.1 million in the aggregate), up
to a maximum of $40.0 million. Eligible accounts receivable in the Trust are
currently not sufficient to allow the Trust to draw on the revolving
certificate. The Company's minimum interest and the Trust's rate of return are
lower for term certificates versus the revolving certificate. The Trust may draw
on the revolving certificate in order to fund such payments to the Company. If
eligible accounts receivable in the Trust fall below the level required to
support the certificates and the Company's minimum interest, certain principal
collections may be retained in the Trust but would be paid to the Company as
such accounts receivable increase. Management anticipates that the ability to
obtain funds under the revolving certificate will increase during the fourth
quarter when working capital requirements are generally at their highest levels.
Funds available under the Credit Agreement total $25.0 million of which
$15.0 million may be used to collateralize letters of credit. As of July 29,
1995, $11.0 million of the total commitment was used to collateralize letters of
credit resulting in available funds of $14.0 million. Funds available under the
Seasonal Credit Agreement total $10.0 million from August 15 to January 15 of
each fiscal year. Both agreements are available through February 3, 1998.
The Company's primary capital requirements are for working capital,
including interest payments on debt, and capital expenditures. Management
expects interest payments and capital expenditures during the last six months of
1995 to be approximately $14.5 million and $8.3 million, respectively.
Generally, capital expenditures are for new store openings, remodeling of
existing stores and customary store maintenance.
Management believes that funds provided by operations, together with
funds available under the Credit Agreement, the Seasonal Credit Agreement and
the Accounts Receivable Program will be adequate to meet the Company's
anticipated requirements for working capital, interest payments and planned
capital expenditures. Estimates as to working capital needs and other
expenditures may be materially affected if the foregoing sources are not
available or do not otherwise provide sufficient funds to meet the Company's
obligations.
9
APPAREL RETAILERS, INC.
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
None.
REPORTS ON FORM 8-K
None.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPAREL RETAILERS, INC.
SEPTEMBER 11, 1995 /s/ CARL E. TOOKER
(Date) Carl E. Tooker
President and
Chief Executive Officer
SEPTEMBER 11, 1995 /s/ JAMES A. MARCUM
(Date) James A. Marcum
Executive Vice President and
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF APPAREL RETAILERS, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-03-1996
<PERIOD-END> JUL-29-1995
<CASH> 16,966
<SECURITIES> 0
<RECEIVABLES> 58,347
<ALLOWANCES> 0
<INVENTORY> 146,735
<CURRENT-ASSETS> 248,568
<PP&E> 87,540
<DEPRECIATION> 0
<TOTAL-ASSETS> 394,945
<CURRENT-LIABILITIES> 86,910
<BONDS> 372,972
<COMMON> 130
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 394,945
<SALES> 296,931
<TOTAL-REVENUES> 296,931
<CGS> 204,093
<TOTAL-COSTS> 204,093
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,636
<INCOME-PRETAX> 4,544
<INCOME-TAX> 1,885
<INCOME-CONTINUING> 2,659
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,659
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
