Atlanta-based Simmons Co.’s profits had some bounce in the third quarter.
But part of that came at the expense of layoffs, according to a filing with the U.S. Securities and Exchange Commission.
Privately held mattress-maker Simmons made $5 million on sales of $177.6 million for the quarter ending Sept. 29. That’s versus a loss of $7.7 million for the same period in 2000, according to filings. Simmons also made $2.4 million on sales of $517.7 million for the nine months ending Sept. 29 versus a loss of $8.5 million on sales of $551.2 million for the same period in 2000.
The profit came during a time when Simmons is still battling declining sales, mainly because some of its customers have fallen by the wayside, including Heilig-Meyers and Montgomery Ward, which both filed for bankruptcy in 2000, and HomeLife Furniture Corp., which filed for bankruptcy in July. Including the impact of the ailing economy, Simmons reported a $23.2 million drop in sales quarter-over-quarter.
During the third quarter, Simmons also laid off 140 more people, partially accounting for an almost $20 million decline in selling, general and administrative expenses for the quarter. Those cuts came both at the corporate and factory levels, said William Creekmuir, executive vice president and chief financial officer of Simmons.
“We don’t expect any more corporate head count reductions,” Creekmuir said.
Other factors in the decline included a decline in bad debt expenses, drops in national ad expenditures and a $3.1 million expense to further exit the retail side of the business, the company reported in the SEC filing.
But Creekmuir said even with the softening economy, the company could be in a position to reap profits again in the future.
“We have the ability to continue to improve performance,” he said. “I think we have that potential, yes.”
Despite the loss of some high-profile customers, Creekmuir said, the company added 500 additional customers to its roster. Most of those are mom-and-pop furniture operators, but Creekmuir said the new customers include Aaron Rents Inc. (NYSE: RNT) and Rent-A-Center Inc.
And Simmons continues to try to sell off 36 mattress stores in Southern California, the last vestiges of its retail business.
“Right now, there’s not a great demand for retail [businesses],” Creekmuir said.
A new North Druid Hills Super Target is causing the company to lay off its current batch of employees, Target Corp. (NYSE: TGT) officials said.
Target is slated to lay off 195 employees at its current Target store on North Druid Hills by Jan. 5, according to documents filed with the Georgia State Labor Department.
But the company will be open to rehiring them once Target reopens the store as a Super Target, said Lanni Harris, a company spokesperson. The remodeled Target will go from 126,000 square feet to 174,000 square feet, she said.
An executive with privately held Bible Factory Outlet said he can’t prophesy another store in the Atlanta metro area in the foreseeable future.
The company’s president, Bill Simmons, said there are no plans for another store in metro Atlanta. The discount religious book and supply retailer just recently opened a 2,800-square-foot store at Discover Mills in Gwinnett County.
Simmons said Alabama-based Bible Factory Outlet — with 38 stores in its chain — only locates in outlet malls and shopping centers, including at the Tanger Outlets in Commerce and Locust Grove, the North Georgia Premium Outlets in Dawsonville and the Peach Factory Stores in Byron, Ga.
Discover Mills afforded the retailer an opportunity to locate in the Atlanta metro area, one of the biggest cities it operates in. And he said its very unlikely that the retailer will chance a second discount store in metro Atlanta.
“Not unless an outlet developer puts up a new center we’re not in,” he said.