SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-Q
Quarterly Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended October 30, 1999
Commission file number 33-27126
------------------
PEEBLES INC.
(Exact name of registrant as specified in its charter)
Virginia 54-0332635
------------ -------------
(State of Incorporation) (I.R.S.Employer
Identification No.)
One Peebles Street
South Hill, Virginia 23970-5001 (804) 447-5200
------------------------------- ----------------
(Address of principal executive offices) (Telephone Number)
Indicate by check (x) 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_____.
As of October 30, 1999, 1,000 shares of Common Stock of Peebles
Inc. were outstanding.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET
PEEBLES INC. & SUBSIDIARIES
(in thousands, except shares and per share amounts)
<TABLE>
<CAPTION>
October January October
30, 1999 30, 1999 31, 1998
----------- -------- -----------
ASSETS (Unaudited) (Unaudited)
CURRENT ASSETS
<S> <C> <C> <C>
Cash $ 25 $ 64 $ 623
Accounts receivable, net 30,227 33,495 28,746
Merchandise inventories 91,407 71,362 92,487
Prepaid expenses 1,891 1,084 2,909
Income taxes receivable 973 1,045 --
Other 2,599 1,289 804
------- ------- -------
TOTAL CURRENT ASSETS 127,122 108,339 125,569
PROPERTY AND EQUIPMENT, NET 53,572 51,949 51,651
OTHER ASSETS
Excess of cost over net assets
acquired, net 39,577 41,017 41,551
Deferred financing cost 2,243 3,289 3,637
Other 2,705 3,692 3,007
------- ------- -------
44,525 47,998 48,195
------- ------- -------
$225,219 $208,286 $225,415
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 22,423 $ 17,516 $ 26,894
Accrued compensation and other
expenses 5,396 6,625 4,835
Deferred income taxes 2,433 2,433 4,592
Current maturities of long-term debt 3,700 3,700 3,600
Other 1,862 2,271 1,183
------- ------- -------
TOTAL CURRENT LIABILITIES 35,814 32,545 41,104
LONG-TERM DEBT 117,670 106,325 120,602
LONG-TERM CAPITAL LEASE OBLIGATIONS 717 896 986
DEFERRED INCOME TAXES 6,990 6,990 5,025
STOCKHOLDERS' EQUITY
Preferred stock- no par value,
authorized 1,000,000 shares, none
issued and outstanding -- -- --
Common stock-- par value $.10 per
share, authorized 5,000,000 shares,
1,000 issued and outstanding. 1 1 1
Additional capital 59,307 59,307 59,307
Retained earnings (deficit):
accumulated from May 27, 1995; 4,720 2,222 (1,610)
------- ------- -------
64,028 61,530 57,698
------- ------- -------
$225,219 $208,286 $225,415
======= ======= =======
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF INCOME
PEEBLES INC. & SUBSIDIARIES
(in thousands, except shares and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three-Month Period Ended Nine-Month Period Ended
------------------------ -----------------------
October October October October
30,1999 31,1998 30,1999 31, 1998
-------- -------- ------- --------
<S> <C> <C> <C> <C>
NET SALES $69,723 $65,601 $204,692 $174,312
COSTS AND EXPENSES
Cost of sales 41,915 40,512 122,206 105,249
Selling, general and
administrative expenses 21,666 19,793 62,682 52,043
Depreciation and amortization 2,622 2,077 6,891 5,754
------ ------ ------- -------
66,203 62,382 191,779 163,046
------ ------ ------- -------
OPERATING INCOME 3,520 3,219 12,913 11,266
INTEREST EXPENSE 2,878 2,876 8,453 7,558
------ ------ ------- -------
INCOME BEFORE INCOME TAXES 642 343 4,460 3,708
INCOME TAXES
Federal, state and deferred 282 137 1,962 1,483
NET INCOME $ 360 $ 206 $ 2,498 $ 2,225
====== ====== ======= =======
RETAINED EARNINGS (DEFICIT)
BEGINNING OF PERIOD 4,360 (1,816) 2,222 (3,835)
------ ------ ------- -------
RETAINED EARNINGS (DEFICIT)
END OF PERIOD $4,720 (1,610) 4,720 (1,610)
EARNINGS PER SHARE $360 $206 $ 2,498 $ 2,225
====== ====== ======= =======
Weighted average common stock
outstanding 1,000 1,000 1,000 1,000
====== ====== ======= =======
See notes to condensed consolidated financial statements
</TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
PEEBLES INC. & SUBSIDIARIES
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine-Month Period Ended
--------------------------
October October
30, 1999 31, 1998
-------- --------
<S>
OPERATING ACTIVITIES <C> <C>
Net income $ 2,498 $ 2,225
Adjustments to reconcile net income to net
cash used in Operating activities:
Depreciation 5,175 4,152
Amortization 2,762 2,547
Provision for doubtful accounts 1,156 999
Changes in operating assets and
liabilities:
Accounts receivable 2,112 3,321
Merchandise inventories (19,945) (23,912)
Accounts payable 4,907 12,783
Other assets and liabilities (2,731) (5,022)
-------- --------
NET CASH USED IN OPERATING ACTIVITIES (4,066) (2,907)
INVESTING ACTIVITIES
Acquisition of Ira A. Watson Co. -- (4,451)
Purchase of property and equipment (7,418) (11,713)
Other -- 228
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (7,418) (15,936)
FINANCING ACTIVITIES
Proceeds from revolving line of credit 279,579 311,902
Reduction in revolving line of credit and
long-term debt (268,134) (297,860)
Proceeds from 1998 Credit Agreement-
acquisition Ira A. Watson Co. -- 24,000
Retirement of Ira A. Watson Co. Pre-
acquisition bank debt & trade liabilities -- (17,895)
Financing Fees- Credit Agreement, as
amended and restated -- (1,113)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,445 19,034
INCREASE (DECREASE) IN CASH AND CASH (39) 191
EQUIVALENTS
Cash and cash equivalents beginning of 64 432
period
-------- --------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 25 $ 623
======== ========
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PEEBLES INC. & SUBSIDIARIES
October 30, 1999
(dollars in thousands)
NOTE A-ORGANIZATION AND BASIS OF PRESENTATION
Consolidation: The consolidated financial statements include the
accounts of Peebles Inc. and its wholly owned subsidiaries,
Carlisle Retailers, Inc. and Ira A. Watson Co. (together
"Peebles" or the "Company"). All significant intercompany
balances and transactions have been eliminated.
The Watson Merger: On June 29, 1998, Peebles Inc. acquired the
Ira A. Watson Co. ("Watson's') for a cash purchase price of
$4,451, which included $1,848 paid to the equity holders of
Watson's, $1,352 paid to a financial services company for the
proprietary credit card accounts receivable, and $1,251 in
acquisition expenses. The purchase method of accounting was used
to allocate the purchase price. The excess of cost over net
assets acquired, $6,102, is being amortized over a twenty-five
year period beginning June 29, 1998.
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal and recurring accruals)
considered necessary for a fair presentation have been included.
In addition, the operating results for the current fiscal periods
are not necessarily indicative of the results that may be
expected for the fiscal year ended January 29, 2000, due to the
seasonal nature of the business of Peebles. For further
information, refer to the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for
the fiscal year ended January 30, 1999. Certain prior year
amounts have been reclassified to conform to the current year
presentation.
NOTE B-ACCOUNTS RECEIVABLE
Accounts receivable are shown net of $1,700, representing the
allowance for uncollectible accounts at October 30, 1999, January
30, 1999 and October 31, 1998. As a service to its customers,
the Company offers credit through the use of its own charge card,
certain major credit cards and a layaway plan. The Peebles'
customer usually resides in the local community immediately
surrounding the store location. Peebles stores serve these local
customers in 15 states: Virginia, Tennessee, North Carolina,
Maryland, Kentucky, West Virginia, Alabama, Pennsylvania, South
Carolina, Ohio, Delaware, New York, Indiana, New Jersey and
Missouri. The Company does not require collateral from its
customers.
NOTE C-MERCHANDISE INVENTORIES
Merchandise inventories are accounted for by the retail inventory
method applied on a last in, first out ("LIFO") basis. In
connection with an acquisition of the Company in May 1995
accounted for using the purchase method, the then existing LIFO
reserve was eliminated and a new LIFO base year was established,
which included an adjustment to fair value (the "Fair Value
Adjustment"). The net effect of the LIFO and market reserves
adjusts inventory to lower of LIFO cost or market.
Merchandise inventories consisted of the following:
October January October
30, 1999 30, 1999 31, 1998
-------- --------- ---------
Merchandise inventories at
FIFO cost $85,433 $65,288 $86,362
Fair Value Adjustment 7,436 7,436 7,436
LIFO/market reserve (1,462) (1,362) (1,311)
------ ------ ------
Merchandise inventories at
lower of cost or market $91,407 $71,362 $92,487
====== ====== ======
NOTE D-INCOME TAXES
Differences between the effective rate of income taxes and the
statutory rate arise principally from state income taxes and non-
deductible amortization related to certain purchase accounting
adjustments.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(dollars in thousands)
RESULTS OF OPERATIONS
The following management's discussion and analysis provides
information with respect to the results of operations for the
three-month period (or "Fiscal Quarter") and nine-month period
ended October 30, 1999 in comparison with the Fiscal Quarter and
nine-month period ended October 31, 1998. At October 30, 1999,
the Company operated 122 stores, with two new store locations
opened October 28, 1999. New store growth has significantly
impacted consolidated operations since June 29, 1998, when the
Watson Merger added 24 stores.
The Company defines a comparable store as having operations for
the entire twelve-month period in both the current and previous
fiscal years. For fiscal 1999, 84 stores will have had
operations for the entire twelve-month periods ending January 29,
2000 and ended January 30, 1999.
Three-Month Nine-Month
Period Ended Period Ended
---------------- ----------------
October October October October
30, 1999 31, 1998 30, 1999 31, 1998
Net sales $69,723 $65,601 $204,692 $174,312
% increase 6.3% 25.2% 17.4% 18.3%
Comparable stores % increase
(decrease) in net sales: .4% (2.8%) .5% 1.9%
Stores in operation at
period end 122 111 122 111
Total stores opened (closed)
during period 2 (1) 5 27
Operations as a Percentage of
Net Sales:
-----------------------------
Cost of sales 60.1% 61.7% 59.7% 60.4%
Selling, general &
administrative expenses 31.1 30.2 30.6 29.9
Depreciation and amortization 3.8 3.2 3.4 3.3
----- ----- ----- -----
Operating Income 5.0 4.9 6.3 6.4
Interest Expense 4.1 4.4 4.1 4.3
Provision for income taxes .4 .2 1.0 .8
----- ----- ----- -----
Net Income .5% .3% 1.2% 1.3%
====== ====== ====== ======
Net sales growth continues to come primarily from new store
locations. In the third Fiscal Quarter, net sales increased
$4,122, or 6.3%, in comparison to the prior year, as sales at non-
comparable stores increased $3,914. In comparing the nine-month
periods ended October 30, 1999 and October 31, 1998, net sales
increased $30,380, or 17.4%, with non-comparable stores providing
a net sales increase of $29,619. In the twelve-month period
following October 31, 1998, the Company opened 11 new store
locations, 5 of which were opened in the current fiscal year.
Net sales at comparable stores increased $208, or .4%, during the
third Fiscal Quarter as slightly weaker August sales, down 2.6%,
were offset by moderate increases in September, up 2.2%, and
October, up 1.6%. For the nine-month period ended October 30,
1999, net sales at comparable stores increased $761, or .5%.
Comparable store net sales increases (decreases) as a percentage
of the prior year comparable period were as follows for the last
11 Fiscal Quarters:
Fiscal Quarter
----------------------------------
First Second Third Fourth Total Year
----- ------ ----- ------ ----------
1997 vs. 1996 5.1% 7.7% 6.9% 3.3% 5.3%
1998 vs. 1997 6.2% 2.9% (2.8%) (1.2%) 0.9%
1999 vs. 1998 (2.6%) 3.6% .4% N/A N/A
Cost of sales as a percentage of net sales improved significantly
in comparing the three-month periods ended October 30, 1999 and
October 31, 1998, at 60.1% and 61.7%, respectively. The
improvement comes primarily from the stores acquired in the
Watson Merger. In the prior year Fiscal Quarter ended October
31, 1998, deeper discounting was used to clear acquired
inventory. At comparable stores, cost of sales was 60.1% and
60.7% as a percentage of net sales for the Fiscal Quarters ended
October 30, 1999 and October 31, 1998, respectively. For the
nine-month periods ended October 30, 1999 and October 31, 1998,
cost of sales as a percentage of net sales was 59.7% and 60.4%,
respectively. This improvement is primarily attributed to
comparable stores, where cost of sales as a percentage of net
sales was 59.1% and 59.7%.
Selling, general and administrative expenses ("SG&A") as a
percentage of net sales, exclusive of depreciation and
amortization, were 31.1% and 30.2% for Fiscal Quarters ended
October 30, 1999 and October 31, 1998, respectively. For the
nine-month periods ended October 30, 1999 and October 31, SG&A as
a percentage of net sales were 30.6% and 29.9%, respectively.
The increase is primarily a result of the new store growth. New
and acquired stores are planned to have a higher expense
structure than mature stores for the first 12 to 18 months of
operation as advertising and payroll expenses are increased to
achieve a market presence. In addition, newer stores typically
have higher occupancy costs than mature stores.
Depreciation and amortization expenses as a percentage of net
sales were 3.8% and 3.4% for the three and nine-month periods
ended October 30, 1999. For the comparable prior year periods
ended October 31, 1998, depreciation and amortization expenses
were 3.2% and 3.3% of net sales. The increase in depreciation
expense is primarily due to the capital expenditures required in
the newer store locations. Amortization expense in the current
fiscal year has increased in comparison to the prior year due to
the goodwill and deferred financing costs capitalized in the
Watson Merger.
Interest expense was 4.1% and 4.4% of net sales for the Fiscal
Quarters ended October 30, 1999 and October 31, 1998,
respectively, and 4.1% and 4.3% for the nine-month periods then
ended. Increased borrowings to consummate the Watson Merger and
to fund the inventory and capital expenditures for the newer
store locations resulted in an increase in interest expense.
This increase, however, was not proportionate to the increase in
net sales.
The effective income tax rate for the three and nine-month
periods ended October 30, 1999 and October 31, 1998 was
approximately 44.0% and 40.0%, respectively. The effective tax
rate differs from the statutory rate primarily due to state
income taxes and nondeductible amortization relating to certain
acquisition related assets.
As a result of the changes discussed above, net income for the
three-month and nine-month periods ended October 30, 1999 was .5%
and 1.2% of net sales, respectively. For the prior year three
and nine-month periods ended October 31, 1998, net income as a
percentage of net sales was .3% and 1.3%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for capital
expenditures in connection with the new store expansion and
remodeling program and for working capital needs. The Company's
primary sources of funds are cash flow from continuing
operations, borrowings under the 1998 Credit Agreement and trade
accounts payable. Merchandise inventory levels typically build
throughout the fall, peaking during the Christmas selling season,
while accounts receivable peak during December and decrease
during the first quarter. Capital expenditures typically occur
evenly throughout the first three quarters of each year.
The Company's operating activities used cash of $4,066 and $2,907
in the nine-month periods ended October 30, 1999 and October 31,
1998, respectively. The Company's working capital grew to
$91,308 at October 30, 1999, up from $84,465 at October 31, 1998.
Operating cash flow was adversely impacted by a change in the
payment cycle required by Frederick Atkins, Inc., the
international cooperative buying service the Company uses as a
primary supplier of its private label merchandise. As a result
of a financial restructuring at Frederick Atkins, Inc., the
members, including the Company, have been required to
significantly shorten the payment cycle for overseas purchases.
As a result, trade accounts payable were lower in comparison to
the prior year in both the three and nine-month periods, and had
increased only $4,907 over the January 30, 1999 balance. In the
prior year, trade accounts payable at October 31, 1998 had
increased $12,783 over the balance at January 31, 1998. The
Company continues to evaluate its ability to procure merchandise
through the cooperative buying service under satisfactory terms,
and, with alternative sources of similar merchandise available,
the Company believes that if any change in the supplier becomes
necessary, the interruption to the flow of merchandise will not
be material. Throughout the third Fiscal Quarter, inventory
levels remained at planned levels, which were less than the prior
year, as merchandise assortments at stores acquired in the Watson
Merger were more representative of a typical Peebles store.
Capital expenditures are the primary use of cash in investing
activities. In the nine-month periods ended October 30, 1999 and
October 31, 1998, capital expenditures totaled $7,418 and
$11,713, respectively. New store locations accounted for the
majority of the capital expenditures in both the current and
prior years. In the current year, the Company has opened 5 new
store locations totaling approximately 114,000 in gross square
footage, and completed several planned store remodelings/space
reallocations, primarily in the former Watson's stores. In the
comparable prior year period, the Company added 823,000 in gross
square footage, including 725,000 gross square feet in the Watson
Merger. Exclusive of the stores acquired in the Watson Merger,
the Company opened 5 new store locations during the nine-month
period ended October 31, 1998, and in November 1998, opened 6
additional stores totaling approximately 210,000 gross square
feet.
The Company has now completed its fiscal 1999 expansion plans.
Based on historical experience, the Company estimates that the
cost of opening a new store will include capital expenditures of
approximately $425 for leasehold improvements and fixtures and
approximately $425 for initial inventory, approximately one-third
of which is normally financed through vendor credit. Accounts
receivable for new stores typically build to 15% of net sales or
approximately $300 within 24 months of the store opening. The
Company may also incur capital expenditures to acquire existing
stores.
The Company finances its operations, capital expenditures, and
debt service payments with funds available under its Revolver.
The maximum amount available under the Revolver is $75 million
less amounts outstanding under letters of credit. The actual
amount available is determined by an asset-based formula. In the
nine-month period ended October 30, 1999, the Company drew a net
$11,445, primarily for working capital and capital expenditures.
In the comparable prior year period, exclusive of the funding
requirements of the Watson Merger, the Company drew a net
$14,042. The Company believes the cash flow generated from
operating activities together with funds available under the
Revolver will be sufficient to fund its investing activities and
the debt service of the 1998 Credit Agreement.
SEASONALITY AND INFLATION
As a retailer offering predominately soft-apparel and selected
home accessories, the Company's business is seasonal, although
less heavily weighted in the fourth quarter than retailers with
comparable offerings of merchandise. Over the past three fiscal
years, quarterly sales as a percentage of total sales have been
consistent at approximately 20%, 22%, 24% and 34% for the first
through fourth quarters, respectively. Peebles' positioning of
its stores in small to medium sized communities with limited
competition, along with the Company's less-promotional, every day
fair value, pricing strategy, produces operations less dependent
on the fourth quarter.
The Company does not believe that inflation has had a material
effect on its results of operations during the past three fiscal
years. Peebles uses the retail inventory method applied on a
LIFO basis in accounting for its inventories. Under this method,
the cost of products sold reported in the financial statements
approximates current costs and thus reduces the likelihood of a
material impact that increases costs. However, there can be no
assurance that the Company's business will not be impacted by
inflation in the future.
MARKET RISK
The Company's interest expense is affected by changes in short-
term interest on the debt outstanding under the 1998 Credit
Agreement. The 1998 Credit Agreement bears interest at rates
based on both the LIBOR and prime lending rates (the "Borrowing
Rates"). Assuming: i) the Borrowing Rates vary by 100 basis
points from their current levels at any given fiscal month, and
ii) the Company maintains an aggregate outstanding debt balance
subject to these rates of $120,000 during the fiscal month of
variance, interest expense would vary by approximately $100 for
that fiscal month.
YEAR 2000 TECHNOLOGICAL ISSUES
In 1998, the Company completed an assessment of the impact on
technological systems, information and non-information, of date-
related processing when the year changes to 2000 and those
systems do not recognize this year as greater than 1999. The
Company's primary information systems are on two IBM AS400
mainframes, with the majority of the software developed
internally. The Company uses purchased software, both packaged
and customized, and certain local networks as support systems
interfacing with the mainframe system. Non-information systems
support physical operations and are primarily purchased or leased
from third parties.
The Company implemented in-house programming standards to address
the year 2000 in 1985, and as a result, the majority of
internally developed software was written with a four digit date
field to properly process information after the year becomes
2000. The programming code has been reviewed, however, for all
internally developed software to look for possible processing
problems related to the year 2000. All programming code
modifications necessary to properly process information in the
year 2000 have been completed. The Company has completed testing
of all major systems which do not rely or interact with purchased
software to verify accurate processing.
Information systems which rely or utilize purchased software,
either solely or in conjunction with internally developed
software, have been evaluated for proper processing of the year
2000. The Company, with assistance and certification from
applicable third parties, has completed its evaluation of all
purchased information software and related systems and determined
those requiring upgrades and those requiring replacement. All
upgrades and/or replacement software are in place and
functioning.
Non-information systems critical to the Company's operations,
including phone systems, energy management systems, security
systems, and merchandise handling systems have either been
certified by the appropriate third party to properly operate
after January 1, 2000 or are not expected to be affected.
The Company relies on a number of third party business partners
to operate its business. These business partners include
merchandise vendors supplying the Company with inventory, banks
serving corporate cash management and individual store locations,
First Data Corp. providing bankcard authorization and
reimbursement, the three major credit bureaus assisting in
proprietary charge card account authorization and risk
management, and a number of contract carriers delivering
merchandise from vendors to the Company's two distribution
centers. The Company has one merchandise supplier which
represented 9% of purchases in 1998. No other vendor supplied
the Company with more than 5% of its merchandise inventory in
1998. The Company is in continuing communication with its
primary vendors to determine the impact on merchandise purchases
of potential Year 2000 business interruptions. The Company has
received assurances from a majority of its non-merchandise
business partners that operations and services will be provided
without interruption after the year turns to 2000. Although
there can be no guarantee that third parties are able to provide
the same level of service after the year turns to 2000 as they
are able to provide prior to that date, the Company believes that
its operations will not be materially, adversely affected.
Related to both its own information and non-information systems,
the Company believes that preliminary, non-comprehensive
contingency plans previously developed for a number of systems
are no longer needed given the progress of remediation. The
Company's normal and ongoing catastrophic failure plans for fire,
natural disaster, extended power loss, and similar situations now
serve as the primary contingency plan.
The costs associated with the evaluation and modification of
information and non-information systems are being expensed as
incurred and are not material to the financial position or
results of operations of the Company.
FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report on Form 10-Q are
forward-looking, based on the Company's evaluation of historical
information and judgments on future events, based on the best
information available at the time. Underlying these statements
are risks and uncertainties which could cause actual results to
differ materially from those forward-looking statements. These
risks and uncertainties include, but are not limited to: i)
consumer demand for the Company's soft-apparel merchandise; ii)
competitive and consumer demographic shifts within the Company's
markets; iii) the Company's access to, and cost of, capital; iv)
the Company's ability to locate and open new store locations on a
timely and profitable basis; v) the Company's ability to
integrate acquired stores into Peebles' overall operations on a
timely basis; vi) the successful management of inventory levels,
related costs and selling, general and administrative costs; and
vii) the timely resolution of Year 2000 compliance issues by the
Company and its vendors.
<PAGE>
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this item is provided under the
caption "Market Risk" under Item 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations.
PART II
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27. Financial Data Schedule
b. Reports on Form 8-K
None
<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.
PEEBLES INC.
Date: November 29, 1999 By /s/ Michael F. Moorman
--------------------------
Michael F. Moorman
President and Chief Executive
Officer
(Principal Executive Officer)
By /s/ E. Randolph Lail
--------------------------
E. Randolph Lail
Chief Financial Officer, Senior Vice
President-Finance, Treasurer and
Secretary
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> JAN-29-2000 JAN-29-2000
<PERIOD-END> OCT-30-1999 OCT-30-1999
<CASH> 25 25
<SECURITIES> 0 0
<RECEIVABLES> 31,927 31,927
<ALLOWANCES> 1,700 1,700
<INVENTORY> 91,407 91,407
<CURRENT-ASSETS> 127,122 127,122
<PP&E> 88,590 88,590
<DEPRECIATION> 35,018 35,018
<TOTAL-ASSETS> 225,219 225,219
<CURRENT-LIABILITIES> 35,814 35,814
<BONDS> 118,387 118,387
0 0
0 0
<COMMON> 1 1
<OTHER-SE> 64,027 64,027
<TOTAL-LIABILITY-AND-EQUITY> 225,219 225,219
<SALES> 69,723 204,692
<TOTAL-REVENUES> 69,723 204,692
<CGS> 41,915 122,206
<TOTAL-COSTS> 41,915 122,206
<OTHER-EXPENSES> 23,888 69,573
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,878 8,453
<INCOME-PRETAX> 642 4,460
<INCOME-TAX> 282 1,962
<INCOME-CONTINUING> 360 2,498
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 360 2,498
<EPS-BASIC> 360 2,498
<EPS-DILUTED> 360 2,498
</TABLE>
