Revenues at Nexcen Brands, the parent of The Athlete’s Foot, decreased 17% in the fourth quarter, to $10.6 million. The decline was attributed to weak credit markets for franchisees and softness in consumer spending and retail traffic. Additionally, the decline reflected the elimination of $200,000 of royalty revenue as a result of the TAF licensing transaction for Australia and New Zealand . In the transaction, Nexcen received a one-time payment of $6.2 million in August 2009 in lieu of recurring royalties.
Nexcens other franchises include Great American Cookies, Shoebox New York, MaggieMoo’s, Marble Slab Creamery, Pretzelmaker and Pretzel Time.
The net loss in the quarter was $543,000, or 1 cent a share, down from a loss of $16.3 million, or 29 cents, a year ago. The loss from continuing operations narrowed to $800,000, or 2 cents a share, from $2.1 million, or 4 cents, a year ago.
For the full year, revenues slid 4% to $45.1 million. The net loss came to $2.8 million, or 5 cents a share, against a deficit of $255.8 million, or $4.52, a year ago.
Nexcens outstanding debt balance was $138.2 million at Dec. 31, 2009, down from $142.3 million a year ago.
According to its 10-K filing, The Athletes Foot had 530 franchised stores at the close of the year, down from 560 a year ago. In total, Nexcens franchised locations were reduced to 1,713 from 1,826 as under-performing and non-compliant stores were closed.
The 10-K also showed the value of the trademarks of The Athletes Foot at $5.5 million at year-end, down from $11.4 million at the 2008 year-end. The Australia/New Zealand licensing agreement resulted in a $5.9 million impairment charge during the year. At December 31, 2007, the TAF trademarks were valued at $51.7 million before massive impairment charges sharply reduced their value in 2008.
