Recession, bad weather pummel Trans World's holidays

GUILDERLAND — The holiday season opened a Pandora’s box at Trans World Entertainment, which saw sales during that period take a steeper-than-expected dive attributed to a national recession, procrastinating shoppers, snow storms and delayed music releases.

The Guilderland entertainment retailer announced Wednesday a 24 percent decline in total sales during the nine-week period ending Jan. 3. That decline during Trans World’s crucial holiday season forced the retailer to lower its earnings outlook for its 2008 fiscal year. The company is now forecasting a loss of $20 million to $25 million, compared to its previous annual guidance of $10 million to $15 million.

“There’s no question the shopper was late, and the fact that they were late and the snow storm didn’t help us,” Trans World Chairman and Chief Executive Officer Robert Higgins said during a conference call with analysts this morning.

The disappointing sales results put Trans World in line with countless other retailers nationwide, who experienced their weakest holiday season since 1970. Trans World’s total sales for the nine-week period were $287 million, down from $378 million a year earlier. Same-store sales fell 14 percent during the same period.

The parent of the f.y.e. chain also announced plans to close 69 of its stores during the quarter, on top of the 35 other locations it closed earlier in 2008. During the fourth quarter of 2007, Trans World pulled the plug on 149 stores — including an f.y.e. at Stuyvesant Plaza in Guilderland — and distribution centers in Johnstown and Canton, Ohio. The retailer expects to end its 2008 fiscal year with 717 stores, down 11.8 percent from 813 a year earlier.

Adding to Trans World’s woes stemming from Black Friday falling so late in November and two crippling December snow storms were the delayed album releases of big-name musical acts. They include U2, 50 Cent and Eminem. Comparable-store music sales slumped during the nine-week period by 22 percent.

“Clearly, the economy was a big hurt,” Trans World President and Chierf Operating Officer Jim Litwak said during the conference call.

Trans World executives said they expect 2008’s hardships to persist through 2009. The company will likely not immediately pull out of negative territory this year.

By late Wednesday morning, the company’s stock price was at $1.31 per share, unchanged from Tuesday’s close but down 70.9 percent from $4.38 a year earlier.