Kellwood Loss in Quarter Partially Due to Men’s
ST. LOUIS – Kellwood Company is reporting a net loss in the second quarter of $65.8 million, ($2.54 per share), a disappointing shift from last year’s net earnings of $7.2 million ($0.28 per share).
Net sales of $465.4 million were slightly better than last year’s comparable quarter sales of $459.6 million.
According to Kellwood’s financial release, net sales of men’s sportswear were adversely affected by the repositioning of the company’s Phat Farm wholesale business, dropping two percent to $114.7 million in the second quarter. Kellwood will be turning its Phat Farm brand into a licensed-only line, closing the Chico, Calif. Distribution center. The company is also blaming manufacturing inefficiencies with its Smart Shirts brand for the sales dip in men’s.
Kellwood will be reorganizing its women’s sportswear businesses, consolidating its seven operating divisions into three.
“Many of our brands achieved solid results this quarter, with particular strength in our XOXO and My Michelle juniors branded sportswear and dress businesses, demonstrating our ability to bring trend right product to market,” said CEO Robert C. Skinner, Jr. in a statement. “Gerber Childrenswear and Baby Phat continued their positive performance, delivering better than anticipated results. While the softening retail environment and in particular, the women’s better sportswear segment, required us to provide higher than planned markdown allowances to our customers, we believe that our general retail performance for Calvin Klein women’s better sportswear was in line with industry trends. We also believe we have identified the manufacturing inefficiencies that affected our Smart Shirts business this quarter and are working diligently to ensure this business operates optimally in the future.”
