The Walking Company comparative store sales increased approximately 2% for the third quarter ended Sept. 30, 2008. The company has been trending up approximately 5% since late July.
Big Dogs
As part of a long-term restructuring and strategic plan, the company has been successful in negotiating a plan to close-out the Big Dogs chain of retail stores. The chain, which peaked at 231 stores, had been reduced to about 140 by the end of 2007, and is currently at 71 stores.
Prior to the restructuring plan, the Big Dogs chain was experiencing declining comparative store sales of approximately 10%, as well as declines in gross margin. Near the end of May, the company began promoting the liquidation of its inventory and the near-term closing of approximately 35 stores (closed by the end of September).
Financial Update
The company says that the orderly liquidation of Big Dogs store inventory during the year has significantly improved its liquidity position, since inventory replenishment has been minimal and the liquidation promotions have generated increased comparative store sales.
The Walking Company estimates the majority of the costs (cash and non-cash) associated with the orderly wind-down of the Big Dogs retail stores will be recorded in 2008, with the remainder to be expensed in 2009 due to accounting requirements. These costs include payments to landlords, employee severance, write-off of remaining assets and other expenses.