SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended: June 28, 1996 Commission File No.: 0-14756
------------- -------
The Cosmetic Center, Inc.
(Exact name of registrant as specified in its charter)
Delaware 52-1266697
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8839 Greenwood Place
Savage, Maryland 20763
(Address of principal executive offices)
(301) 497-6800
(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 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.
Class A Common Stock, par value $.01 per share, outstanding as
of August 1, 1996 - 2,713,354 shares
Class B Common Stock, par value $.01 per share, outstanding as
of August 1, 1996 - 1,582,780 shares
<PAGE>
THE COSMETIC CENTER, INC.
Table of Contents
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements 4-8
Item 2. Management's Discussion and Analysis 9-12
of Financial Condition and Results
of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
2
<PAGE>
PART I
ITEM 1. Financial Statements PAGE
Consolidated Balance Sheets
As of June 28, 1996 (unaudited) and
September 29, 1995 4-5
Consolidated Statements of Operations (unaudited)
Three months and nine months ended
June 28, 1996 and June 30, 1995 6
Consolidated Statements of Cash Flows (unaudited)
Nine months ended June 28, 1996
and June 30, 1995 7
Notes to Consolidated Financial Statements (unaudited)
Three months and nine months ended
June 28, 1996 and June 30, 1995 8
3
<PAGE>
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
June 28, September 29,
1996 1995
(unaudited)
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 1,297 $ 1,320
Accounts receivable, net. . . . . . . 1,004 881
Inventories . . . . . . . . . . . 54,055 61,891
Prepaid expenses. . . . . . . . . . 686 529
Prepaid income taxes. . . . . . . .. 1,288 1,142
Deferred income tax benefit. . . . . 970 970
--------- -------
Total current assets . . . . . . . . . . 59,300 66,733
--------- --------
PROPERTY AND EQUIPMENT:
Furniture, fixtures and equipment . . . 12,084 11,410
Leasehold improvements. . . . . . . 5,245 4,932
Leased property - capitalized. . . . .. 1,670 1,670
--------- ------
18,999 18,012
Accumulated depreciation and amortization 9,134 7,211
---------- ------
9,865 10,801
---------- ------
DEPOSITS AND OTHER ASSETS. . . . . . . 383 307
---------- ------
DEFERRED INCOME TAX BENEFIT. . . . . . 126 126
---------- ------
TOTAL ASSETS. . . . . . . . . . . $ 69,674 $77,967
========= =======
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
June 28, September 29,
1996 1995
---------- -------------
(unaudited)
<S> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . $11,869 $17,309
Note payable - bank. . . . . . . . . . . . . 10,590 11,985
Accrued expenses. . . . . . . . . . . . . . . 3,441 3,628
Income taxes payable. . . . . . . . . . . . - 430
Current portion of obligation under capital leases 306 291
------- -------
Total current liabilities. . . . . . . . . . . . . 26,206 33,643
OBLIGATION UNDER CAPITAL LEASES . . . . . . . . 189 420
DEFERRED RENT. . . . . . . . . . . . . . 1,318 1,339
OTHER LIABILITIES. . . . . . . . . . . . . . . 380 624
------- -------
TOTAL LIABILITIES . . . . . . . . . . . . . . 28,093 36,026
------- -------
SHAREHOLDERS' EQUITY:
Class A Common stock, $.01 par value; authorized
5,000,000 shares; issued 2,741,472 shares and
2,721,472 shares, respectively. . . . . . . . 28 27
Class B Common stock, $.01 par value; authorized
5,000,000 shares; issued 1,614,924 shares and
1,594,942 shares, respectively. . . . . . . . 16 16
Additional paid-in capital . . . . . . . . . . . 21,953 21,740
Retained earnings . . . . . . . . . . . . . . 20,152 20,512
Treasury stock - Class A common stock, 28,118 shares
at cost (214) -
Treasury stock - Class B common stock, 32,144 shares
at cost (354) (354)
------- -------
TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . 41,581 41,941
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY . . . . $69,674 $77,967
======= =======
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- ---------------------
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C>
Net sales. . . . . . . . . . $ 32,802 $ 31,289 $ 103,645 $ 102,567
---------- ---------- ---------- -----------
Cost of sales including buying,
occupancy and distribution. . . . 25,486 24,641 80,913 81,380
Selling, general and
administrative expenses. . . . . 7,375 6,771 22,642 19,192
---------- ---------- ---------- -----------
Total operating expenses . . . . . 32,861 31,412 103,555 100,572
---------- ---------- ---------- -----------
Income (loss) from operations . . . (59) (123) 90 1,995
Other income, net . . . . . . . 23 21 74 88
Interest expense . . . . . . . (251) (217) (769) (496)
---------- ---------- ---------- ----------
Earnings (loss) before income taxes. . (287) (319) (605) 1,587
Income taxes . . . . . . . . . (116) (129) (245) 643
---------- ---------- ---------- ----------
Net earnings (loss) . . . . . . $ (171) $ (190) $ (360) $ 944
========== ========== ========== ==========
Net earnings (loss) per common share
Primary. . . . . . . . . . $ (0.04) $ (0.04) $ (0.08) $ 0.22
========== ========== ========== ==========
Fully Diluted . . . . . . . . $ (0.04) $ (0.04) $ (0.08) $ 0.22
========== ========== ========== ==========
Weighted average shares outstanding
Primary . . . . . . . . . . 4,312,584 4,335,105 4,316,817 4,361,703
========== ========== ========== ==========
Fully Diluted . . . . . . . . 4,312,584 4,335,105 4,316,817 4,319,492
========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------
June 28, June 30,
1996 1995
-------- --------
<S> <C>
Cash flows from operating activities:
Net (loss) earnings . . . . . . . . . . . . . . . . . . . . . $ (360) $ 944
Adjustments to reconcile net earnings (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . 2,062 1,769
Change in assets and liabilities:
Accounts receivable, net. . . . . . . . . . . . . . . . (123) 669
Inventories. . . . . . . . . . . . . . . . . . . . . . . 7,836 (4,115)
Prepaid expenses. . . . . . . . . . . . . . . . . . . . (296) (1,198)
Prepaid income taxes. . . . . . . . . . . . . . . . . . (146) (194)
Deposits and other assets. . . . . . . . . . . . . . . . (76) (137)
Accounts payable. . . . . . . . . . . . . . . . . . . . (5,440) 1,597
Accrued expenses. . . . . . . . . . . . . . . . . . . . (187) (352)
Deferred rent. . . . . . . . . . . . . . . . . . . . . . (21) 126
Other liabilities. . . . . . . . . . . . . . . . . . . . . (244) -
Income taxes payable. . . . . . . . . . . . . . . . . . (430) -
------- -------
Net cash provided (used) by operating activities. . . . . . 2,575 (891)
------- -------
Cash flows from investing activities:
Capital expenditures, net. . . . . . . . . . . . . . . . . . (987) (3,939)
------- -------
Net cash used by investing activities. . . . . . . . . . . (987) (3,939)
------- -------
Cash flows from financing activities:
Net (payments) borrowings under line-of-credit agreement. . (1,395) 4,960
Repayments of capital lease obligations. . . . . . . . . . . (216) (202)
------- -------
Net cash (used) provided by financing activities. . . . . . (1,611) 4,758
------- -------
Net decrease in cash and cash equivalents . . . . . . . . . . . . (23) (72)
Cash and cash equivalents at beginning of period. . . . . . . 1,320 1,382
------- -------
Cash and cash equivalents at end of period. . . . . . . . . . $ 1,297 $ 1,310
======= ========
Supplemental Disclosures of Cash Flow Information and
Non Cash Activities:
Cash payments for interest. . . . . . . . . . . . . . . . . $ 794 $ 477
Cash payments for income taxes. . . . . . . . . . . . . . 331 837
Treasury stock received in exchange of options exercised. . . 214 354
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
JUNE 28, 1996 and JUNE 30, 1995
(Unaudited)
Note 1 Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements contained herein should be read in
conjunction with the consolidated financial statements of The Cosmetic Center,
Inc., (the "Company") for the year ended September 29, 1995.
The accompanying consolidated financial statements are unaudited, but
include all adjustments (consisting only of normal recurring adjustments) which
management considers necessary for a fair presentation at June 28, 1996 and June
30, 1995 and for the three and nine month periods then ended. The accounting
policies applied in the consolidated financial statements are consistent with
the accounting policies applied in the consolidated financial statements of the
Company for the year ended September 29, 1995.
The results for the three and nine month periods ended June 28, 1996 and
June 30, 1995 are not necessarily indicative of results expected for the entire
year.
Merchandise Inventories
The Company's inventories, consisting primarily of cosmetic, fragrance,
beauty aid, and related items, are valued at the lower of cost or market. Cost
is determined using the weighted average cost method.
Rental Expenses
Certain store leases provide for minimum rentals plus additional rentals
computed as a percentage of sales in excess of amounts specified in the lease as
minimum rentals. The Company accrues percentage rent expense during interim
periods based on actual sales in excess of the prorated annual amounts specified
in the related lease.
Note 2 Subsequent Event
The Company decided to close its eight retail stores in the Atlanta, Ga.
marketplace effective August 4, 1996. As a result, the Company will absorb in
the fourth quarter of the fiscal year ended September 27, 1996, a pre-tax
restructuring charge of approximately $4,000,000. The charge will primarily
include the cost of future lease obligations, a write off of certain assets and
a severance package for its employees.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
All statements contained herein that are not historical facts, including
but not limited to, statements regarding anticipated future capital
requirements, the Company's ability to develop relationships with the
manufacturers of professional hair care products and the Company's ability to
generate cash from operations are based on current expectations. These
statements are forward looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: the
availability of sufficient capital to finance new store openings or working
capital requirements, competitors in the marketplace that may have substantially
more capital resources than the Company, the Company's ability to develop
relationships with the manufacturers of professional hair care products, general
business and economic conditions, and other risk factors described from time to
time in the Company's reports filed with the SEC. The Company wishes to caution
readers not to place undue reliance on any such forward looking statements,
which statements are made pursuant to the Private Securities Litigation Reform
Act of 1995 and, as such, speaks only as of the date made.
General
The Company was founded in 1957, with its initial operations consisting of
the sales of cosmetic products to wholesale customers. At June 28, 1996, the
Company operated 76 stores under the name "The Cosmetic Center(R)" located in
the greater metropolitan market areas of Washington, D.C.; Richmond, Virginia;
Baltimore, Maryland; Chicago, Illinois; Charlotte/Raleigh/Durham, North
Carolina; Philadelphia, Pennsylvania; and Atlanta, Georgia. The Company sells
approximately 25,000 brand name prestige and mass-merchandised cosmetic
products.
Atlanta, Ga. Marketplace
The Company decided to close its eight retail stores in the Atlanta, Ga.
marketplace effective August 4, 1996. As a result, the Company will absorb in
the fourth quarter of the fiscal year ended September 27, 1996, a pre-tax
restructuring charge of approximately $4,000,000. The charge will primarily
include the cost of future lease obligations, a write off of certain assets and
a severance package for its employees. The expected future cash flow
requirements of the restructuring charge is approximately $2,800,000 and will be
paid over the life of the leases.
Hair Salon Strategy
Traditionally, the manufacturers of professional hair care products have
allowed their products to be sold by retail hair salons only. Historically, the
Company was able to purchase professional hair care products from secondary
sources, and sales of these products generally accounted for 5% to 6% of the
Company's annual retail sales. The Company's purchases of these products and
sale at value prices to consumers was not looked upon favorably by these
manufacturers. With the growth of the Company over the past three years
sufficient quantities of top selling professional hair care products became
increasingly difficult to purchase through secondary sources. As a result, the
Company decided to add hair salons in its existing stores as an add-on beauty
service and with the anticipation of developing a direct relationship with the
manufacturers of professional hair care products.
In the latter half of fiscal 1994, the Company opened hair salons in twelve
of the thirteen new stores in the Philadelphia, Pa., Charlotte/Raleigh, N.C. and
Atlanta, Ga. market areas. In February 1995, the Company began to retrofit
existing stores in its Washington D.C. and Chicago, IL. market areas. The
Company operates hair salons in 67 of its 76 stores.
In the Spring of 1995, the Company obtained a verbal commitment from one of
the four major professional hair care products manufacturers to sell to the
Company on a direct basis. However, in order to receive these
9
<PAGE>
products on a direct basis, the Company was asked to remove from all of its
retail stores, all professional hair care products that were purchased from a
secondary source. In order to build a relationship with this manufacturer, the
Company agreed to the manufacturer's requirements in June 1995. Approximately 30
days later, the Company began to receive professional hair care products
directly from this manufacturer and continues to receive such products today.
However, this manufacturer represents one third of the 6% of sales volume the
Company surrendered in order to build the direct purchase relationship. The loss
of these professional hair care product sales has adversely affected retail
sales and profits. The Company is attempting to develop a similar relationship
with the other three major manufacturers, but there are no assurances this will
be achieved.
Although the Company has lost sales and profits during the transition
stages of this arrangement, the Company believes that there are future benefits
to be derived from maintaining and expanding the arrangement. The gross margin
on professional hair care products purchased on a direct basis are significantly
higher than the gross margin on professional hair care products purchased on a
secondary source basis. In addition, because of the direct relationship, the
Company is able to maintain sufficient quantities of professional hair care
products in stock, which it could not otherwise maintain.
Results of Operations
Results from operations continued to be impacted by the following factors:
expenses associated with the operation of hair salons in 67 of its 76 stores,
the relatively large base of stores opened over the past two and one half years
whose sales volume have not grown to a maturity level of stores in existing
markets and lastly, increased interest costs associated with the expansion of
new stores.
Consolidated net sales for the nine months ended June 28, 1996 were
$103,645,000, a increase of $1,078,000, or 1.1%, from the $102,567,000 in
consolidated net sales for the nine months ended June 30, 1995. Consolidated net
sales for the three months ended June 28, 1996 were $32,802,000, a increase of
$1,513,000, or 4.8%, from the $31,289,000 in consolidated net sales for the
three months ended June 30, 1995.
Retail sales for the nine months ended June 28, 1996 were $102,312,000, an
increase of $1,880,000, or 1.9%, from the $100,432,000 in sales for the nine
months ended June 30, 1995. Comparable store retail sales for the period
decreased by $4,044,000, or 4.1%. The decrease in comparable store retail sales
is primarily attributable to lost sales as a result of the severe winter weather
on the East Coast during the quarter ended March 29, 1996, weak retail sales in
men's and women's fragrances and the loss of professional hair care product
sales, the later resulting from the Company's change in methods of purchasing
professional hair care products (See Hair Salon Strategy). Retail sales for the
three months ended June 28, 1996 were $32,369,000, an increase of $1,635,000, or
5.3%, from the $30,734,000 in sales for the three months ended June 30, 1995.
Comparable store retail sales for the period increased by $301,000, or 1.0%,
resulting from increased cosmetic and treatment sales and hair salon service
revenue. The Company operated 76 stores at June 28, 1996 and 71 stores at June
30, 1995.
Wholesale sales for the nine months ended June 28, 1996 were $1,333,000, an
decrease of $802,000, or 37.6%, from the $2,135,000 in sales for the nine months
ended June 30, 1995. Wholesale sales for the three months ended June 28, 1996
were $433,000, an decrease of $122,000, or 22.0%, from the $555,000 in sales for
the three months ended June 30, 1995. The Company has focused greater attention
to its retail business but continues to serve its remaining market of
independent drug and merchandise stores. Management continues to evaluate the
viability of the wholesale division.
Cost of sales, including buying, occupancy and distribution expenses, was
$80,913,000 (78.1% of sales) for the nine months ended June 28, 1996 versus
$81,380,000 (79.3% of sales) for the nine months ended June 30, 1995. Cost of
sales, including buying, occupancy and distribution expenses, was $25,486,000
(77.7% of sales) for the three months ended June 28, 1996 versus $24,641,000
(78.8% of sales) for the three months ended June 30, 1995. The dollar decrease
for the nine months ended June 28, 1996 is primarily attributable to lost
comparable store sales volume which was partially offset by the five additional
stores in operation at June
10
<PAGE>
28, 1996. The dollar increase for the three months ended June 28, 1996 is
primarily attributable to the five additional stores in operation at June 28,
1996 and comparable store sales growth. Cost of sales, including buying,
occupancy and distribution expenses, as a percentage of sales were affected
positively by gross margin increases primarily resulting from the direct
purchases of professional hair care products. This percentage gain was partially
offset by new stores, whose sales volume has not yet grown to the level
experienced by mature stores, thus having a higher cost of sales percentage
because of occupancy costs.
Selling, general and administrative expenses ("S G & A") were $22,642,000
(21.9% of sales) for the nine months ended June 28, 1996 versus $19,192,000
(18.7% of sales) for the nine months ended June 30, 1995. Selling, general and
administrative expenses were $7,375,000 (22.5% of sales) for the three months
ended June 28, 1996 versus $6,771,000 (21.6% of sales) for the three months
ended June 30, 1995. S G & A expenses increased $3,450,000 for the nine months
ended June 28, 1996 over the comparable period of last year. Of this increase
approximately $1,720,000 is associated with stores not in operation last year
and approximately $1,680,000 is associated with operating expenses of hair
salons in stores opened longer than one year. The remaining increase in S G & A
expenses for the nine months ended June 28, 1996 is attributable to increased
advertising expenses and marginal increases at comparable stores and corporate
overhead levels. S G & A expenses increased $604,000 for the three months ended
June 28, 1996 over the comparable period of last year. Of this increase
approximately $420,000 is associated with stores not in operation last year and
approximately $550,000 is associated with operating expenses of hair salons in
stores opened longer than one year. The increases of new store and hair salon S
G & A expenses for the three months ended June 28, 1996 were partially offset by
decreases of S G & A expenses at comparable store and corporate overhead levels.
S G & A expenses as a percentage of sales were impacted for two reasons: 1) S G
& A percentage of comparable stores was negatively impacted by reduced
comparable stores sales volume during both the nine months ended June 28, 1996
and 2) new stores generally have a higher S G & A percentage because their sales
volume has not matured.
Interest expense was $769,000 (0.7% of sales) for the nine months ended
June 28, 1996 versus $496,000 (0.5% of sales) for the nine months ended June 30,
1995. Interest expense was $251,000 (0.8% of sales) for the three months ended
June 28, 1996 versus $217,000 (0.7% of sales) for the three months ended June
30, 1995. The increase in interest expense is primarily attributable to
borrowings under the credit facility to support working capital requirements and
the opening of four stores during the nine months ended June 28, 1996
Liquidity and Capital Resources
The Company's working capital was $33,094,000 at June 28, 1996 compared to
$33,090,000 at September 29, 1995. The ratio of current assets to current
liabilities was 2.3 at June 28, 1996 compared to 2.0 at September 29, 1995.
Net cash provided by operating activities amounted to $2,575,000 for the
nine months ended June 28, 1996. Of the cash provided by operating activities,
$2,396,000 was provided by a reduction in inventory of $7,836,000 less a
reduction in accounts payable of $5,440,000.
Net cash used by investing activities amounted to $987,000 for the nine
months ended June 28, 1996. This investment is primarily attributable to the
four new stores opened during the period and completion of the hair salon
retrofit construction.
Net cash used by financing activities amounted to $1,611,000 for the nine
months ended June 28, 1996. During the period ended June 28, 1996. the Company
reduced its credit facility by $1,395,000 and repaid capital lease obligations
in the amount of $216,000.
The Company has an unsecured credit facility (the "Facility") with a bank
for maximum borrowings of $15,000,000. The Facility, which expires on February
28, 1997, is subject to repayment on demand and bears interest, payable monthly,
at an annual rate equal to the bank's prime rate or at LIBOR plus 200 basis
points. The Facility requires compliance with certain restrictive covenants
including maintenance of minimum tangible
11
<PAGE>
net worth. At June 28, 1996, the outstanding balance under the Facility was
$10,590,000.
The Company's future capital needs primarily result from its plan to open
additional new stores. The Company's estimated cost of opening a new store is
approximately $725,000, including $550,000 for initial inventory and $175,000
for leasehold improvements, furnishings and fixtures, point-of-sale equipment,
hair salon equipment, and other items. The Company has opened four stores in
fiscal 1996 and there is one additional store scheduled to open in August 1996.
The Company does not plan on opening any additional stores in fiscal year 1996.
The Company may open additional stores during the next fiscal year, however,
this would be dependent upon locating the property and negotiating the economics
of the lease. The Company believes that funds available from the Facility and
internally generated funds will provide sufficient capital to meet the Company's
needs for the next year.
12
<PAGE>
PART II
Item 6. (A) Exhibits
EXHIBIT 27 - Financial Data Schedule as of June 28, 1996
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
for which this report is filed.
13
<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.
THE COSMETIC CENTER, INC.
(Registrant)
Date: August 1, 1996 By /s/ Ben S. Kovalsky
----------------------
BEN S. KOVALSKY
President and Chief Operating Officer
Date: August 1, 1996 By /s/ Bruce E. Strohl
----------------------
BRUCE E. STROHL
Vice President - Finance
and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
The Cosmetic Center, Inc.'s June 28, 1996 consolidated financial
statements and is qualified in its entirety by reference to such
consolidated financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-28-1996
<CASH> 1,297
<SECURITIES> 0
<RECEIVABLES> 1,004
<ALLOWANCES> 10
<INVENTORY> 54,055
<CURRENT-ASSETS> 59,300
<PP&E> 18,999
<DEPRECIATION> 9,134
<TOTAL-ASSETS> 69,674
<CURRENT-LIABILITIES> 26,206
<BONDS> 189
<COMMON> 44
0
0
<OTHER-SE> 41,537
<TOTAL-LIABILITY-AND-EQUITY> 69,674
<SALES> 103,645
<TOTAL-REVENUES> 103,645
<CGS> 80,913
<TOTAL-COSTS> 103,555
<OTHER-EXPENSES> (74)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 769
<INCOME-PRETAX> (605)
<INCOME-TAX> (245)
<INCOME-CONTINUING> (360)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (360)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
