HUDSON, OH-Despite reporting losses in the company’s second quarter, national fabric and craft retailer Jo-Ann Stores Inc. remains on track to deliver a 4% to 5% full-year increase in square footage by the fourth quarter.

Keeping on target, JoAnn opened six superstores and one traditional store in the second quarter and closed nine traditional stores, and just in the last week, JoAnn opened four additional superstores. Year-to-date, the company has opened 21 superstores and two traditional stores, while closing 27 traditional units. For the balance of the year, the company expects to open 19 superstores, two traditional stores, and close 25 to 30 traditional units.

While the superstores are the primary key to the company’s growth, executive vice president and CFO Brian Carney told investors during Monday’s earnings call that new traditional store openings will better serve specific markets. Discarding the 14,600-sf format of the conventional fabric store, JoAnn will open larger traditional stores, or “mini-superstores,” at 25,000 sf,that embrace the racetrack design of the larger units. These stores are planned for scenarios in which leases have expired and the retailer plans to relocate, as well as areas where the surrounding demographics cannot support the average 35,000-sf superstore.

Alan Rosskamm, chairman and CEO, remained optimistic about the store openings, but could not deny the poor results in the company’s second quarter ended July 30. “We knew the second quarter would be challenging,” Rosskamm admitted to investors. “Historically the second quarter is always our lowest volume quarter of the year which makes it difficult to cover fixed costs.”

Net loss for the quarter was $5.1 million, or 23 cents loss per diluted share, compared with net income of $0.3 million, or .01 cents per diluted share in fiscal 2005. Earlier this month, the company lowered its guidance from a loss of 22 to 24 cents per share from a loss of 10 to 15 cents per share.

Same-store sales decreased 0.5% versus a 3.1% same-store sales increase for the same period last year. Net sales for the second quarter increased 3.5% to $383.8 million from $371 million in the prior year. Gross margins for the quarter decreased to 48.2% of net sales from 49% in the second quarter last year, due to a more promotional environment that resulted in reduced selling margins.

Rosskamm attributed the company’s second quarter loss to lighter-than-expected store traffic, coupled with ongoing weakness in the company’s home decorating textiles floral and seasonal businesses, which led sales results but did not meet the company’s target.

“Macro trends aside, we have been working diligently on fresh merchandising and marketing programs aimed at our fall and holiday selling seasons that should translate into improved sales trends for the second half,” Rosskamm said in closing. “Consequently, I am confident that we can deliver improved earnings in the second half of this year.”

At the end of the second quarter, the company operated 712 Jo-Ann Fabrics and Crafts traditional stores and 135 Jo-Ann superstores in 47 states.