Broadway Reports Loss of $43.3 Million for Quarter

Broadway Stores Inc. on Monday reported a first-quarter net loss of $43.3 million, losing more than some industry analysts had expected during what has been a disappointing year for most retailers.

The loss for the 13-week period ended April 29 is more than double the $18 million the company lost during the same period a year ago. Total sales for the quarter dropped 1.7%, to $423.9 million from $431.1 million in the year-ago period. Same-store sales--revenue from stores open at least a year--decreased 6.8%.

“Our first-quarter results were disappointing and negatively impacted by a series of economic factors, including continuing difficulties in the California economy and higher interest rates,” said David Dworkin, president and chief executive of the Los Angeles-based company.

Higher interest rates pose a problem for Broadway because the company has about $1.28 billion in debt. Like other major retail chains, Broadway also had to cope with lackluster consumer demand. Nordstrom, J.C. Penney and Dayton Hudson Corp.--operator of the Mervyn’s and Target chains--were among those recently reporting disappointing quarterly earnings.

However, the performance of Broadway was worse than expected, said Thomas Friedberg, an industry analyst with Genesis Merchant Group in San Francisco. He said the company has had to mark down prices frequently because many consumers are responding only to sales events.

“It’s a tough situation,” Friedberg said. “The company is caught in a cost-price squeeze.”

On a positive note, the company, which had reduced spending on store renovations until their effect on sales could be seen, said it is beginning to see sales increases at a number of recently remodeled stores.

Broadway operates 83 department stores under the names The Broadway, Emporium and Weinstocks.