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BMTC launches EconoMax as sales, earnings fall in Q1 PDF Print E-mail
Written by Michael J. Knell   
MONTREAL (09 May 2012) - In response to what it sees as a hesitant consumer marketplace in Quebec, BMTC Group has launched EconoMax, a four-unit promotionally-priced banner. It made the move after falling into the red at the end of the first quarter and suffering a decline in sales which, in turn, was attributed to sagging consumer confidence.

For the three months ending March 31, 2012, revenues were $154.8 million, compared to $163.2 million for the same period last year - a decline of 5.1%.

The publicly-held merchant declared a net loss of $1.8 million or four cents per share, reversing last year's earnings of $2.8 million or five cents per share.

The company said the cost of options had no effect on first quarter results although the current share buy-back scheme reduced earnings by one a share. In a practice not mirrored by many other public companies, BMTC costs options paid to senior management as either an expense or revenue in its net earnings calculation. An increase in the company's share price incurs an expense, with a decrease incurs revenue.

In a note to shareholders, Yves Des Groseillers, BMTC's chairman, president and chief executive officer, said the weakness seen in the market in early 2011 was amplified in the opening months of 2012.

"The Quebec sales tax increase, tighter credit conditions and significant job losses are not conducive to spending on durable consumer goods," he said, adding, "Also, for the past few years, the middle class consumer has seen their buying power reduce significantly."

This environment prompted the launch of EconoMax, which Des Groseillers described as offering "warehouse prices in a warehouse dé order to consumers a variety of more affordable products."

All four stores are converted BMTC liquidation centres in the greater Montreal region.

The banner is firmly positioned in the promotional and entry level price points. On its web site, EconoMax is offering a queen-size bedroom set from Dynamic Furniture for $799; a bonded leather sofa from Primo International for $199; a Nenuphar II queen-size mattress from Spring Air Sommex (boxspring not included) for $349; and, a laundry pair from Inglis for $549.

The costs associated with launching the new banner were assumed in the first quarter, although no dollar figure was provided.

Des Groseillers also reported that a 10,500 square foot expansion to the Brault & Martineau store in LaSalle will be complete in June, bringing the store's total surface are to 55,500 square feet.

The replacement for the Ameublements Tanguay store in Levis is also scheduled to open at the end of June 2012.

BMTC remains the largest full-line furniture, mattress and appliance retailer in Quebec. It operates 32 stores under the Brault & Martineau, Brault & Martineau Sleep Gallery, Ameublesment Tangquay and EconoMax banners.

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