House of Fabrics Posts $95.4-Million Loss for Year

House of Fabrics Inc., a Sherman Oaks-based chain of fabric stores that filed for federal bankruptcy protection in November, reported deep losses and reduced revenues for the quarter and fiscal year that ended Jan. 31.

The company reported a loss of $9.07 million for the fourth quarter, compared to a profit of $212,000 in the same three-month period a year earlier. Fourth-quarter sales fell to $101 million, down 32% from $148 million a year earlier.

For its fiscal year, House of Fabrics posted a loss of $95.4 million, more than triple the $29.5-million loss the company reported in fiscal 1994. Revenue dipped to $416 million, down 24% from $547 million a year earlier.

The company said the decline in sales partly reflected a one-time charge of $46.7 million associated with the closing of stores during the year, and a $19-million write-down of inventories.

The company said it has closed 213 stores as of Jan. 31, and that an additional 69 stores are scheduled to close by Aug. 31. After that, the company will consist of 364 stores with an average sales volume of $1 million per store, company officials said.

Gary L. Larkins, chief executive of House of Fabrics, said restructuring efforts “have already produced positive momentum in the first quarter of fiscal 1996 and should, on balance, lead to an improved balance sheet and help return the company to overall profitability.”

Since announcing the restructuring last year, House of Fabrics has moved to improve operating margins by reducing point-of-sale discounts, added $120 million in new inventory in preparation for the traditionally busy fall season, and secured a $20-million line of credit, the company said.

Larkins said the company will file a plan of reorganization by August, and expects to emerge from bankruptcy protection near the end of the year.