The Athlete's Foot (TAF) saw comps decline 9.6% in the fourth quarter. Overall comps for its parent, NexCen Brands, Inc., were up 6.4%, led by a 25% gain by TAF internationally. TAF International constitutes 65% of NexCen's TAF stores. For all of 2007, domestic comps for TAF declined 6.2% while international comps at TAF jumped 21.5%. TAF contributed $9 million in royalty revenue for NEXC for the year.
On a conference call with analysts, Dave Meister, NexCen's CFO, said the weakness in TAF domestically is mostly a reflection of softness in the retail segment of the U.S. economy. “Many of the changes that we are making in TAF are designed to improve domestic sales at the store level,” said Meister.
In a Q&A session, Bob D'Loren, NexCen's CEO, said TAF opened six new stores under its new performance prototype in the U.S. and one in China, and those stores are “doing extremely well.” Three stores opened under the new fashion concept, the Black store, are also doing “extraordinarily well.”
“We opened one in Sweden,” DLoren commented. “The store did one of the highest first day sales in the history of the company. People were lined up outside the store before it opened. It's a very exciting concept and we are watching the Black fashion store very, very carefully. It's a hot concept.”
Asked what's driving TAF's international business, D'Loren said “it varies,” noting that it's been performance-driven in Australia while fashion-driven in the Middle East and in Europe. “What's really driving it are very strong global economic local environments,” said D'Loren.
Overall, NexCen Brands Inc., a brand acquisition and management company, widened its Q4 loss to $3.8 million, or 7 cents per share. Revenue rose to $10.3 million from $1.9 million last year.
