Duane Reade announces Q4 earnings, implementing cost savings program
NEW YORK Duane Reade announced on Tuesday that in light of the current economic conditions, it is implementing a cost savings program that includes hiring and wage freezes. The news comes as the Manhattan-based retailer posted a fourth-quarter net loss of $17.4 million and a 2.4% boost in total same-store sales for the quarter.
“We are encouraged by our solid performance in 2008, despite increasingly difficult economic conditions during the latter months of the year. Due to these conditions, we are taking steps to reduce our cost structure in 2009 and will continue to assess the impact of macro factors on our business,” said John Lederer, chairman and CEO, who noted that the company remains “cautiously optimistic” in its 2009 outlook.
In an effort to curb costs, the 251-store company is implementing a cost savings program that includes hiring and wage freezes in administrative and certain other areas of the business, as well as the implementation of a number of strategic cost savings initiatives to improve efficiency and eliminate non-value added activities. The moves are expected to result in a cost savings of between $7 million and $10 million in 2009.
For the fourth quarter, total net sales rose 7.6% to $464.5 million from $431.6 million in the year-ago period. Net retail store sales, which exclude pharmacy resale activity, increased 3.4% to $428.6 million. Total same-store sales increased 2.4%, with a front-end same-store sales increase of 1.5%. Pharmacy same-store sales increased 3.6%.
Net loss for the quarter totaled $17.4 million compared with $15.1 million in the previous year.
Operating loss for the quarter totaled $3.6 million compared with operating income of $1.2 million in the year-ago period. The current quarter includes a $3.5 million litigation settlement charge and an increase in other expenses.
As previously reported by Drug Store News, the company is testing new ideas for store layout and design in various locations throughout the city, which includes more modern-looking signage, wider aisles, improved lighting, a fresh food offering, and a repositioned pharmacy department.
By year-end, the company expects to have about 30 new or renovated stores.
From a signage standpoint, it will begin to rebrand the bulk of the chain in the coming months in a “cost efficient” manner to project more continuity.
BestMed unveils anti-snoring device that fits in nose
GOLDEN, Colo. BestMed earlier this month showcased its Brez nasal breathing aids, a device that fits inside the nose and reduces snoring and improves sleep quality, at the ECRM Cough-Cold & Allergy trade event.
Available in three sizes, the device inserts easily into the nose and gently lifts, expands and supports the interior walls of the nasal passages to reduce the resistance of airflow.
Data from an independent clinical study involving 26 snorers (12 men and 14 women) with snoring (non-apneic) bed partners showed that those who used Brez experienced a 52% decrease in snoring events from an average of 1,247 to 654. Snorers who used the device had only a 22.4% likelihood of persistent snoring and disturbing their bed partner’s sleep compared with their pre-treatment scores of 100%.
Equally interesting, 88% of bed partners reported improved sleep quality when the product was used by the snorer,” stated George Gwinn, clinical investigator for PsyPharma Global and allergy and pulmonary specialist. “Each day, pharmacists nationwide serve as front-line healthcare providers to help consumers deal with issues such as snoring. Based on these data, it appears that Brez may be an innovative solution that pharmacists can recommend.”
Boiron expands homeopathic flu and cold relief brand
NEWTON SQUARE, Pa. Boiron continued to roll out its pediatric line extensions of its popular homeopathic flu-relief brand Oscillococcinum at the ECRM Cough-Cold & Allergy conference earlier this month. The homeopathic remedies — Children’s Oscillococcinum and Children’s ColdCalm Pellets, for the flu and the cold, respectively — appear to be a natural for children. The medicines are safe and clinically proven effective in a delivery format of sweet, small pellets that kids gravitate toward.
Boiron is also packing a little marketing punch behind its pediatric line extensions with a $6.6 million advertising campaign behind Oscillo.
Given all the concern over the safety and efficacy of children’s cough and cold medicines, homeopathic cold and flu medicines helped drive higher homeopathic sales in the mass channel. Representing 64% of all homeopathic sales in food, drug and mass (minus Walmart), homeopathic cold-flu SKUs represented 91% of all homeopathic growth, according to Nielsen ScanTrack data for the 52 weeks ended Dec. 27, as cited by Boiron. Total cold and flu sales across mass channels over that period totaled $1.3 billion, up 1.2%, as tabulated by Boiron. Homeopathic cold and flu sales totaled $151.6 million, representing growth of 11.4%. Incidentally, Boiron’s cold and flu SKUs generated $9.1 million, up 13%.