Fishman said during the call that the company opened seven new stores so far this year, and now plans to close just 30 of the company's 1,368 stores by January, "not as high as a store-closure count of what we thought would be 45 to 50 stores. We were able to negotiate favorable lease terms in a number of stores we thought we would close. Additionally, we have more new stores in the pipeline in 2008 than we had at this same time last year for 2007."
He says that he's gone to pains to make sure the company can grow profitably without having to continuously open new stores. "We have wanted more stores," he said, "but our business cannot support the rent being demanded in certain markets and locations. If we can't invest in a new store and generate an acceptable return, we absolutely will not sign the deal. Real estate rents need to be more appealing, and we may be starting to see that change ever so slightly."
The company reported its comparable same store figures in the third quarter decreased 0.5% from last year's strong showing of 5.8% growth in Q3 2006. Fishman said the current retail environment is tough for anyone to drive meaningful high-end growth. "It's just too pervasive to say that the macro environment is not affecting retail," he said during the call. The company is now projecting same-store sales in the fourth quarter to be "slightly negative," during a time that brings in a little more than half of the company's income for the year.
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