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REEDS JEWELERS ANNOUNCES FIRST QUARTER SALES AND EARNINGS

 REEDS JEWELERS ANNOUNCES FIRST QUARTER SALES AND EARNINGS
 WILMINGTON, N.C., June 30 /PRNewswire/ -- Reeds Jewelers, Inc. (NASDAQ-NMS: REED) today announced sales and earnings for the first fiscal quarter ended May 31, 1992.
 Net sales were $11,189,000, down 0.4 percent from last year's first quarter sales of $11,232,000; the record sales in the first quarter of last year were positively impacted by the return of military personnel from Operation Desert Storm. Comparable store sales were negative 1.8 percent for the quarter. Net earnings increased 1.4 percent to $70,000 from $69,000 for the same period last year. Earnings per share were $.02 for both periods.
 Gross margins fell to 39.0 percent of net sales compared to 41.1 percent in the first quarter of last year. The lower margins were caused by increased promotional events to stimulate business during this period of general economic weakness. Higher occupancy costs also contributed to the reduction of gross margins.
 Selling, general and administrative expenses increased to 39.9 percent from 38.7 percent in the first quarter last year. Primarily as a result of improved collection effectiveness, bad debt expense was lowered to 3.9 percent from 5.4 percent of net sales. Interest expense fell to 6.9 percent from 8.2 percent of net sales, primarily because of reduced average borrowings under the Company's revolving credit facility and the lower prime rate upon which the Company's interest cost is based.
 Alan M. Zimmer, President and Chief Executive Officer of Reeds, commented that "we are concentrating the majority of our efforts this year on improving the sales and profit performances in our existing stores. We are pleased with the results of the first quarter because of the impact last year from the return of military personnel from Operation Desert Storm. We look forward to the balance of this year with great anticipation."
 Reeds completely remodeled its store in Jacksonville, N.C., and expanded and completely remodeled its store in Regency Square in Jacksonville, Fla., during the first quarter. Reeds Jewelers is a specialty retailer presently operating 67 stores primarily in enclosed regional shopping malls in 11 states principally in the Southeast. The Company specializes in the sale of fine jewelry, and emphasizes "Quality, Value and Service."
 REEDS JEWELERS, INC.
 FINANCIAL HIGHLIGHTS
 (dollars in thousands, except per share data)
 Percent Three months ended May 31,
 REVENUES: Change 1992 1991
 Net sales -0.4 $11,189,000 $11,232,000
 Other (principally
 finance charges) 3.5 1,432,000 1,384,000
 Total revenues (A) 12,621,000 12,616,000
 COSTS & EXPENSES:
 Cost of sales (including
 occupancy costs) 3.1 6,822,000 6,618,000
 Selling, general and
 administrative 2.6 4,459,000 4,346,000
 Bad debt -27.1 441,000 605,000
 Interest -16.2 774,000 924,000
 Total costs & expenses (A) 12,496,000 12,493,000
 EARNINGS BEFORE
 INCOME TAXES 1.6 125,000 123,000
 Income taxes 1.9 55,000 54,000
 NET EARNINGS 1.4 $70,000 $69,000
 EARNINGS PER SHARE (A) $ 0.02 $ 0.02
 Weighted average shares
 outstanding (A) 3,462,500 3,462,500
 Number of stores open 1.5 67 66
 (A) -- not meaningful
 -0- 6/30/92
 /CONTACT: Alan M. Zimmer, President & CEO, 919-350-3111, or James R. Rouse, Treasurer & CFO, 919-350-3116, both of Reeds Jewelers, Inc./
 (REED) CO: Reeds Jewelers, Inc. ST: North Carolina IN: REA SU: ERN


DF -- CH001 -- 5069 06/30/92 10:08 EDT
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Date:Jun 30, 1992
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