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REEDS JEWELERS ANNOUNCES THIRD QUARTER SALES AND EARNINGS

 REEDS JEWELERS ANNOUNCES THIRD QUARTER SALES AND EARNINGS
 WILMINGTON, N.C., Jan. 15 /PRNewswire/ -- Reeds Jewelers, Inc. (NASDAQ-NMS: REED) today announced sales and earnings for the third fiscal quarter ended Nov. 30, 1991.
 Net sales were a third quarter record of $12,019,000, up 2.7 percent from $11,701,000 for the same quarter last year. Comparable store sales were 0.4 percent positive for the quarter as a result of strong results in November. The Company lost $261,000, 2.2 percent of net sales and $0.07 per share, in the quarter compared to a loss of $169,000, or $0.05 per share, in the third quarter of last year.
 Gross margins fell to 38.2 percent of net sales compared to 43.0 percent in the third quarter of last year. The lower margins were caused by increased promotional events to stimulate business during this period of general economic weakness. In addition, while diamond sales were flat for the quarter when compared to last year, the Company generated strong sales increases in the lower-margin watch category. Higher occupancy costs also contributed to the reduction of gross margins.
 Selling, general, and administrative expenses were reduced to 38.9 percent this year from 40.3 percent in the third quarter last year. Bad debt expense increased from 6.4 percent to 6.7 percent of net sales, primarily as a result of a continued higher mix of credit sales; compared to total receivables, bad debt during the two periods remained constant at 3.1 percent. Interest expense fell to 7.6 percent from 8.5 percent of net sales, primarily because of lower interest rates and the higher sales level.
 "We are pleased to be recording sales increases when many other retailers are struggling for sales," said Alan M. Zimmer, President and Chief Executive Officer of Reeds. "We have continued to sacrifice gross margins in order to maintain sales and market share and have held several promotional events in order to eliminate various items from our inventories," Zimmer continued. "We are especially pleased with our expense controls and with the savings resulting from lower interest rates. Our all-important December sales were essentially flat, up 0.1 percent; comparable store sales were down 0.7 percent for the month. We preliminarily expect margins to continue to be down, although we expect to make a profit for the year."
 Sales for the first nine months ended Nov. 30, 1991 were $34,211,000, up 3.9 percent from $32,915,000 in the same period a year earlier. Year-to-date, the Company has lost $388,000, or $0.11 per share, compared to a loss of $169,000 during the first nine months of last year.
 Reeds opened one new store during the quarter in Jacksonville, N.C., its second store in the market. The Company closed its store in Cape Girardeau, Mo. the day after Christmas because of lease expiration. 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)
 Three Months Ended Nine Months Ended
 Pct. Nov. 30, Nov. 30, Pct. Nov. 30, Nov. 30,
 Chg 1991 1990 Chg 1991 1990
 Net sales 2.7 $12,019 $11,701 3.9 $34,211 $32,915
 Other revenues
 (principally
 finance
 charges) 18.4 1,340 1,132 15.1 4,066 3,532
 Total
 revenues 4.1 13,359 12,833 5.0 38,277 36,447
 Cost of sales
 (including
 occupancy
 costs) 11.3 7,422 6,668 12.0 20,753 18,524
 Selling, general
 and adminis-
 trative -0.8 4,675 4,715 -0.6 13,412 13,489
 Bad debt
 expense 8.6 808 744 15.6 2,049 1,772
 Interest
 expense -7.2 919 990 -9.4 2,755 2,944
 Net earnings/
 (loss) -53.5 -261 -170 -129.6 -388 -169
 Earnings/
 (loss) per
 share -40.0 $-0.07 $-0.05 -120.0 $-0.11 $-0.05
 Weighted
 average
 shares
 outstanding (A) 3,463 3,462 (A) 3,463 3,462
 Number of
 stores open (A) 68 68 (A) 68 68
 (A) Not meaningful
 -0- 1/15/92
 /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


CM -- CH004 -- 9967 01/15/92 11:49 EST
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Date:Jan 15, 1992
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