Citi Trends in big merchandise shift; will open 25 to 30 stores annually
Citi Trends is accelerating its move away from apparel. And it’s still looking for a CEO.
As part of a previously announced comprehensive strategic initiative, the value-priced urban fashions retailer said it is moving “aggressively” to more gift-giving merchandise during the holiday season and expanded home assortments throughout the year. New fixtures have been added to Citi Trend stores to accommodate the shift, whose early results are encouraging, the company said.
Commenting on Citi Trend’s third-quarter results, Bruce Smith, president and CEO, said that the company’s ongoing efforts to shift the merchandise mix more towards the accessory and home categories contributed to its best comparable-store sales result since last year’s second quarter.
“Comparable store sales increased 2.6% in the quarter,” Smith said, “with October registering the largest increase, benefiting from an accelerated shift towards our non-apparel merchandise.”
In line with its new strategic initiative, Citi Trends aims to open 25 to 30 new stores annually and complete major remodels in 50 existing stores each year. Citi Trends currently operates 566 stores in 33 states.
“We have already approved 14 new store locations to be opened in 2020 and expect to perform major remodels in 20 stores in January 2020, followed closely by 30 more stores in the second quarter of 2020,” the company stated.
In other news, Citi Trends appointed Peter Sachse, a board member and “special advisor” to the CEO as interim CEO, effective as of December 9, 2019. As previously announced, Smith is stepping down as CEO, but will remain as president until Feb. 1. The retailer is continuing its search for a permanent CEO.
Citi Trends had a net loss of $1.1 million, or $0.09 per diluted share, in the quarter ended Nov. 2, compared with a net loss of $0.5 million, or $0.04 per diluted share, in last year’s third quarter. Selling, general and administrative expenses in this year’s third quarter included approximately $0.7 million of costs associated with the planned CEO transition and board changes reported previously.
Total sales increased 4.4% to $183.1 million. Comparable store sales increased 2.6% in the quarter.