The Walking Company, which is now a division of Big Dog Holdings, Inc., saw second quarter revenues increase 19.8% to $21.5 million from $17.9 million in the year-ago period, thanks in large part to an 18.3% increase in comparable store sales. TWC also saw a $100,000 increase in Internet/catalog sales. Net income for the 77-store chain jumped 57.6% to $854,000, compared to net income of $542,000 in Q2 last year.
The increase in TWC comparable store sales was primarily attributed to “improved inventory levels and merchandise selection” at the TWC stores since Big Dog Holdings, Inc. purchased TWC out of bankruptcy in March 2004. The ability to get better goods also had an impact on margins, as fresher goods pushed GM up 130 basis points to 51.8% of sales, compared to 50.5% for Q2 2004.
Increased leverage from the sales gain also helped carve 190 basis points out of the sales expense line in Q2, with selling, marketing, and distribution expenses coming in at 39.5% of sales versus 41.4% for the year-ago quarter.
During the quarter, Big Dog Holdings, Inc. entered into a definitive purchase agreement to purchase the assets of Footworks, a division of a privately held shoe retailer, for approximately $10 million plus about $6 million in earn-outs. The acquisition, which will be funded by cash and debt, includes a chain of 8 retail stores selling comfort shoes and accessories. The deal is expected to close by the end of the month. The stores are expected to roll up under The Walking Company business.
