Struggling fashion chain Merry-Go-Round Enterprises Inc. disclosed more disappointing sales figures yesterday, saying revenue in its stores open for at least a year declined by 16 percent in March compared with the same month a year ago.
Merry-Go-Round had a partial excuse: few national apparel chains had a good month. Same-store sales fell by 5 percent at Limited Inc., by 7 percent at Gap Inc. and by 22 percent at Charming Shoppes Inc.
"This past March was basically a terrible month" for most stores, said New York retail analyst Kurt Barnard. "What we are dealing with is a decline in consumer spending across the board. Apparel was particularly hard-hit."
But Merry-Go-Round's results dropped below a depressed level from a year ago. Comparable-store sales for March 1994 had fallen by 21 percent from levels of March 1993. The company has endured more than a year of monthly same-store sales declines, most of them in double-digit percentages.
Merry-Go-Round is under pressure to show sales gains and generate positive cash flow. The Joppa-based fashion chain is scheduled to emerge from bankruptcy proceedings in June or July. But its tentative reorganization plan, approved in broad detail by major creditors and shareholders, depends on a financial turnaround.
The new managers, Chairman Thomas Shull and President James Kenney, have told reporters and analysts not to expect positive sales comparisons until spring fashions are completely stocked and revenue for April is disclosed.
Last month's results were hurt partially because seasonal buying for Easter shifted from March last year to April this year, they said.
"Our sales are continuing to improve, particularly in the Merry-Go-Round division, but our men's apparel sales at Dejaiz, Chess King and Cignal haven't reflected the same level of performance," Mr. Shull said yesterday.
More sharp sales declines could delay Merry-Go-Round's reorganization. Managers, creditors and shareholders have discussed postponing the company's emergence from bankruptcy proceedings until after the important back-to-school season, said one knowledgeable source.
Sustained, sharp sales drops through the summer could threaten a tentative plan to give 25 percent of the reorganized company to shareholders and 75 percent to creditors.
Total Merry-Go-Round sales for March fell by 27 percent, to $45.3 million, the result of closing more than 400 poorly performing stores.