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NEW YORK — Sweater maker Hampshire Group coaxed better profits from weaker sales during the fourth quarter with strength in women’s related separates and men’s sweaters.
Net income for the quarter increased 31.4 percent to $8.3 million, or $2.02 a diluted share, compared with $6.3 million, or $1.49, a year earlier. Without a one-time loss related to the 2003 sale of an investment subsidiary, which depressed year-ago earnings, income rose 22.6 percent.
Sales for the three months ended Dec. 31 slid 6.4 percent to $105.2 million from $112.5 million.
Dealing with the uncertainty surrounding the planned acquisition of May Department Stores by Federated Department Stores, Hampshire chairman and chief executive officer Ludwig Kuttner is seeking to grow the company’s business. “We are actively working on expanding our customer base and market tiers,” Kuttner said during a telephone interview.
The majority of the firm’s sales come from traditional department stores and moderate-price national chains, such as Kohl’s and J.C. Penney, a dynamic the ceo doesn’t expect to change. “That still will be our main focus; this is our life,” he said.
As for the impact of the Federated-May deal, Kuttner said: “Nobody right now knows where it will really go. We supply to Federated and hope that what they expand, they will allow us to participate in that.”
Hampshire, which markets Dockers and Levi’s men’s sweaters under a licensing deal with Levi Strauss & Co., is launching Levi’s branded women’s sweaters for fall.
Net income for the full year increased 143.9 percent to $13.7 million, or $3.33 a diluted share, skewed by a $5.8 million after-tax loss in 2003 from the sale of the firm’s investment subsidiary, Hampshire Investments. This compared with net earnings of $5.6 million, or $1.20, in 2003.
Sales for the 12 months were up 3.2 percent to $301.2 million from $292.7 million.
During the year, Hampshire brought in some new yarns, including chenille blends, and revved up its embellishments, such as buckles and snaps.
As the firm moves into 2005, Kuttner is reinforcing the company’s emphasis on product, given that competition is coming from “everybody and his brother.”
“Everybody’s fighting for market share,” he said. “Everybody wants to grow, and there’s not that much growth.”
Over the last three months, Hampshire made a number of executive changes and promotions.
Gene Warsaw was appointed senior executive vice president and chief marketing officer. He had been president and ceo of the Hampshire Designers Inc. division. Renee McGovern was hired as ceo of the Hampshire Designers Inc. Ladies Division. She was most recently president of Amerex Group’s men’s and women’s businesses.
Olga Yurechko was promoted to executive vice president of design and merchandising. She had been vice president. At the Hampshire Brands division, which produces Levi’s and Dockers sweaters, president Michael Culang was promoted to ceo.
Warsaw, McGovern and Culang all report to Kuttner.