Along with the announcement yesterday that second-quarter revenue decreased for direct marketer Hanover Direct Inc., the Edgewater, NJ, company released restated financial results for all periods dating back to fiscal 2000 due to the discovery of an accounting error.
Net revenue fell by $9.4 million, or 8.9 percent, for the 13 weeks ended June 26 to $96.5 million compared with the year-ago period. The drop resulted from lower inventory levels caused by the company's reduced liquidity, according to a statement from Hanover. A lower circulation rate for its Domestications catalog also contributed to the performance.
However, Internet sales in the quarter increased 2.9 percent to $28.3 million compared with last year.
Net income for the quarter was $600,000.
Wayne Garten, president/CEO of Hanover, said in a statement that The Company Store's continued strong performance helped deliver Hanover's third consecutive profitable quarter.
Hanover Direct identified what it termed a “revenue recognition cut-off issue” during the second quarter, resulting in the restatement of revenues. The issue was the result of revenue being recorded in advance of the actual shipment of merchandise to customers.
Hanover Direct's portfolio of home fashion, apparel and gift catalogs and e-commerce platforms includes Domestications, The Company Store, Silhouettes, International Male, Scandia Down and Gump's by Mail.