NEW YORK — Bankrupt Warnaco Group, which is still on course to file its plan of reorganization with the bankruptcy court in Manhattan later today, on Friday reported a quarterly loss of nearly $860 million.
This story first appeared in the September 30, 2002 issue of WWD. Subscribe Today.
According to its quarterly report filed with the Securities and Exchange Commission, net losses for the three months ended April 6 widened to $857.8 million, or $16.20 a diluted share, compared with a $63.6 million loss, or $1.20, in the year-ago period.
Revenues fell 17.9 percent to $410.1 million from $499.2 million. Sportswear and swimwear revenues dropped 18.7 percent to $236.9 million, while intimate apparel sales declined 11.5 percent to $144.2 million. Sales at its retail stores were $29 million, plummeting by 35.4 percent in the quarter, mostly because of the reduction in outlet stores and a same-store sales decline of 9 percent.
The company reported $1.1 billion in assets and $312.4 million in liabilities. Professional fees in the quarter were $7.2 million.
The filing reported that sales fell almost across the board in all sportswear and swimwear categories: Authentic Fitness sales were down 23 percent to $112.6 million; Chaps by Ralph Lauren dropped 25.2 percent to $32.6 million; Calvin Klein Jeans/Kids dipped 11.3 percent to $79.2 million, and Calvin Klein Accessories slipped 15.3 percent to $3.4 million. The declines reflect either the elimination of sales to membership clubs (Chaps), reductions in sales to off-pricers (Calvin Klein Jeans/Kids) or other strategic decisions undertaken by Warnaco. The one bright spot was ABS, which saw an increase in quarterly sales of 8.2 percent to $9.2 million.
In intimates, the Warner’s and Olga brands were up 5.5 percent to $58.5 million, while Calvin Klein Underwear sales dipped by 0.8 percent to $52.8 million.
The company also said that the claims by Speedo International Ltd. in its September 2000 lawsuit filed in Manhattan federal court would likely be resolved through the bankruptcy court “in the context of assumption or rejection of the Speedo licenses or the confirmation of the company’s plan or plans of reorganization.”
The lawsuit, filed against Warnaco, sought the termination of certain licensing arrangements in addition to damages. A Warnaco spokesman said the reorganization plan does address resolution of the Speedo claims, but declined further comment.
Still pending in Manhattan federal court is a shareholder class-action suit, a result of the consolidation of six such complaints filed between Aug. 22 and Oct. 26, 2000.
The apparel firm also filed a Form 8-K detailing monthly operations for the two periods from May 5 through June 1 and July 7 through Aug. 3. In May, the company posted a $10.2 million loss on sales of $91.6 million. For July, the loss was $2 million on sales of $84.6 million.