COMMERCE, Calif. – High-end denim manufacturer Blue Holdings had a disastrous second quarter of 2007 with net sales cut nearly in half from $15.2 million last year to $8.4 million. It gets worse: Net income in Q2 2006 was $1.7 million, versus a mere $7,000 this year.
The company’s new CEO Glenn Palmer, hired in July, was optimistic: “I am very excited to be here and have already begun to take the necessary steps to execute a turnaround strategy designed to stabilize the business and put it back on a growth curve. While we still have a great deal of work to do, we have begun to implement a comprehensive action plan with key strategic initiatives. Specifically, we are in the process of cutting costs to reduce our SG&A by approximately 10 percent by the end of the year, selling off our excess inventory, and aggressively reviewing and evaluating the long-term viability of our brands, licensees and retail strategy.”
Palmer took over for Paul Guez, who still serves as the company’s chairman.
Blue Holdings is resting a good deal of hope on the Palmer’s shoulders. CFO Larry Jacobs said in the company’s financial release, “We recognize that we had problems in the latter half of 2006 which caused us to take mark downs on inventory. Since then, we have made many important changes to our business and are confident in the new direction the company is taking and the progress that has been made to date. Even with the lower sales volumes experienced in each of the first two quarters this year, we were able to generate a modest profit. With the hiring of Glenn and the initiatives we are taking, we believe we are implementing all the necessary steps to grow our business.”
Last June, MR reported that Blue Holdings had run into trouble with NASDAQ after it neglected to get shareholder approval for a 500,000 share deal with musician Will.i.am from the Black Eyed Peas in exchange for promotions.
Blue Holdings’ brands include Antik Denim, Yanuk, Taverniti So Jeans, and Faith.