Cablevision Dumping Wiz Stores
Cablevision, the New York-based telecommunications giant, had closed 26 Wiz stores last fall in an effort to stem losses in its retail division. Cablevision lost a whopping $500 million on The Wiz during the five years it operated the chain, not including the $80 million paid the Jemal family, who founded the stores 27 years ago. Previously known as "Nobody Beats The Wiz," the stores were New York icons in the 1980s, but were unable to cope with pressure in recent years from larger competitors like Circuit City and Best Buy.
Debt-saddled Cablevision, which also operates American Movie Classics (AMC) and The Independent Movie Channel (IMC), tried many store redesigns and management teams in an attempt to achieve profitability, and had been under growing pressure from the investment community to exit the retail business. A dismal winter holiday season was the final nail in The Wiz's coffin. The chain reported a 21% drop in sales for the year, and a 33% decline in sales for the fourth quarter, with a loss of $21 million.
Shuttering or selling the stores was the only option open for Cablevision. "Continuing to operate the stores is no longer a viable option for Cablevision as business conditions at the retailer eroded due to a weakened retail economy and other factors," said an official statement. On February 10, Cablevision stock rose 82¢ during regular trading hours on the New York Stock Exchange and went up another 28¢ after the news was released, reaching $17.35/share, a nice gain from the $16.25 closing price the previous Friday.
On February 11, Cablevision posted an overall profit for its fourth fiscal quarter, with net income reported at $517.4 million, compared with a net loss of $281.6 million for that period in 2001. Revenue for the quarter was $1.15 billion, up 2.4% from $1.12 billion in the same period the previous year, driven largely by demand for digital cable services and high-speed Internet access. Analysts quoted by Dow Jones Newswires predict revenue of as much as $4.56 billion for the 2003 fiscal year.