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REEDS JEWELERS ANNOUNCES FIRST QUARTER SALES AND EARNINGS

 WILMINGTON, N.C., June 22 /PRNewswire/ -- Reeds Jewelers, Inc. (NASDAQ-NMS: REED) today announced record sales and higher earnings for the first fiscal quarter ended May 31, 1993.
 Net sales were a record $11,995,000, up 7.2 percent from last year's first quarter sales of $11,189,000. Comparable store sales were up 5.5 percent for the quarter. Net earnings nearly doubled to $132,000 from $70,000 for the same period last year. Earnings per share increased to $.04 from $.02.
 Gross margins improved to 42.4 percent, up from 39.0 percent in the first quarter of last year. The higher margins resulted from significantly higher sales of diamonds and other precious jewelry, and lower occupancy costs.
 Selling, general, and administrative expenses increased to 44.6 percent from 39.9 percent in the first quarter last year, primarily because of higher planned advertising and compensation costs. Bad debt expense was lowered to 3.4 percent from 3.9 percent of net sales. Interest expense fell to 6.2 percent from 6.9 percent of net sales, resulting from reduced average borrowings under the company's revolving credit facility.
 Alan M. Zimmer, president and chief executive officer of Reeds, commented that "we are pleased with the record first quarter sales and with the near doubling of first quarter earnings. We have increased our advertising budget and the level of staffing in many of our stores as part of our effort to increase market share. We are committed to increasing earnings 15 percent over the record earnings of last year, and are taking the steps we believe appropriate for accomplishing that objective."
 Reeds opened new stores in Springfield, Va.; Biloxi, Miss.; and Mary Esther, Fla., during the first quarter of this year. Reeds Jewelers is a specialty retailer presently operating 69 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)
 Three months ended May 31,
 Pct. Change 1993 1992
 REVENUES:
 Net sales 7.2 $11,995,000 $11,189,000
 Other (principally finance
 charges) 13.8 1,630,000 1,432,000
 Total revenues 8.0 13,625,000 12,621,000
 COSTS & EXPENSES:
 Cost of sales (including
 occupancy costs) 1.4 6,914,000 6,822,000
 Selling, general, and
 administrative 19.9 5,348,000 4,459,000
 Bad debt -6.8 411,000 441,000
 Interest -3.5 747,000 774,000
 Total costs & expenses 7.4 13,420,000 12,496,000
 EARNINGS BEFORE INCOME TAXES 64.0 205,000 125,000
 Income taxes 32.7 73,000 55,000
 NET EARNINGS 88.6 $132,000 $70,000
 EARNINGS PER SHARE 100.0 $0.04 $0.02
 Weighted average shares
 outstanding (A) 3,462,500 3,462,500
 Number of stores open 3.0 69 67
 (A) Not meaningful
 -0- 6/22/93
 /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

SB -- CH001 -- 4454 06/22/93 09:48 EDT
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Date:Jun 22, 1993
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