Bombay stock tumbles 25% in heavy trading

FORT WORTH, Texas — Specialty retailer The Bombay Company’s stock price fell sharply today, losing about 25% of its value in heavy trading on the New York Stock Exchange.


Its shares declined 20 cents from Friday’s close, to 59 cents per share. Some 2.1 million shares, about nine times the average daily volume, were traded.
On Friday, the Fort Worth-based company filed its 10-K annual report with the Securities and Exchange Commission with an attached auditor’s statement indicating that some matters “raise substantial doubt about the company’s ability to continue as a going concern,” Bombay said in a release.
The statement cited the Top 100 chain’s recent losses. The 400-store retailer recently reported a net loss of $52.8 million in its year ended Feb.  3 and lost $46.7 million the previous year. Sales last year were down 5.1% and same-store sales dipped 5.4%.
Bombay said it has been pursuing a program to reduce expenses, increase revenue and improve liquidity, the retailer said, but with mixed results.
“While we have been successful in reducing expenses since undertaking the program, we have had difficulty reversing the declining sales trend … in part because of a very difficult business climate in the furniture and home accessories sector,” the company said in a statement.
“Management has identified a series of additional activities that it believes will be critical to achieving the company’s long-term goals of returning to profitability and positive cash flow,” Bombay said.
Among other things, the retailer said it’s aims include “reducing inventory levels and returning to historical levels of inventory turnover, exiting its dedicated BombayKIDS business and improving the productivity of the square footage previously dedicated to it, closing selected underperforming stores, enhancing its merchandise assortment, allocation and presentation and other initiatives, some of which would require capital over the next three to five years.”
Bombay said it is negotiating with potential lenders for the financing.
The company previously said it has hired investment banking firm William Blair & Co. to evaluate “a range of strategic alternatives,” including pursuing its current course, seeking a strategic partner or buyer, “seeking a financial partner to make a substantial equity investment, or some combination of the foregoing.