The Forzani Group Ltd. said aggressive holiday promotions, a slightly weaker Canadian dollar, and cooler weather helped it clean out its inventory and post impressive sales growth during the Holiday season. Total retail system sales were up 14.3% for the Holiday period, after excluding the impact of newly-acquired Athlete's World. Forzani acquired the 138-store chain out of bankruptcy in mid-December.
When including Athletes World sales, Forzani said its total retail sales grew 21.3% over the comparable period last year. Strong consumer response to more aggressive promotions pushed system wide same-store sales up an impressive 11.1% for the period. That growth broke out as 7.4% at corporate-owned stores and 18.5% percent at franchise division stores.
The robust sales followed anemic third-quarter comp sales that Forzani had attributed in part to Canadians shopping on the U.S. side of the border to take advantage of the stronger Canadian dollar. The Canadian dollar rose from approximately 94 cents per U.S. Dollar to $1.04 per U.S. Dollar during the third quarter, but has since declined to $1.02 per U.S. Dollar. Unseasonably warm weather in Canada in
October also pushed some apparel sales into the fourth quarter.
Forzani said the improvement on those two fronts, as well as its aggressive promotions left it with a “very clean” inventory position at the end of the Holiday season. The periods strong sales, however, came at the cost of narrower margins at corporate stores, which the retailer predicted would happen in its third quarter release. Same-store “margin dollars,” however, continued to track ahead of the prior year, the company said.
