ZCMI reported net sales of $184.15 million for its fiscal year ended Jan. 31, down $163,000 from sales of $184.25 million for the previous year.
Lowell M. Durham, ZCMI president and chief executive officer, said 1987 was a "difficult and challenging" year for the department store chain."However, important objectives were accomplished to steer ZCMI forward in 1988, despite a sluggish Utah economy," said Durham.
Among those were ZCMI taking back operation of its Decorative Home department last May. ZCMI had earlier leased out its home furnishings department to be operated by another company but reacquired it when the company failed.
"This was not a planned move," said Durham of the reacquisition, "but was necessary and was accomplished in the most economical way possible."
Another change made in 1987, said Durham, was closure of ZCMI's Family Store division - formerly called the Budget Store. Durham said this action was taken "in order to offer a broader merchandise selection for the Utah and southern Idaho markets."
With 1986 sales of $18.60 million, 10 percent of total ZCMI sales, that closure was clearly part of the reason for 1987's slight drop in overall sales.
"Although ZCMI had hoped to accomplish this change in a more vibrant economy," said Durham, "the closure of the Family Store division undoubtedly cost ZCMI sales and profit in 1987. However, these changes and costs will pay important dividends in ZCMI's future, setting the stage for growth with more profitable merchandising opportunities."
Despite last year's disappointing results, Durham said ZCMI approaches 1988 aggressively with two new 25,000 square-foot specialty stores opening in August in Fashion Place and Foothill Village.