Stronger sales were insufficient to offset higher interest expense and accounting items as American Apparel Inc. more than doubled losses in the third quarter.
In the three months ended Sept. 30, the net loss escalated to $18.5 million, or 18 cents a diluted share, from a loss of $7 million, or 7 cents, in the year-ago quarter. Sales grew 15.1 percent, to $162.2 million from $140.9 million, as comparable-store sales were up 20 percent and comparable online sales up 21 percent.
Gross margin declined to 52.5 percent of sales from 53.2 percent in the 2011 quarter.
While interest expense was up 18.4 percent to $10.5 million from $8.8 million a year ago, the biggest toll on the bottom line came from a $13.3 million loss tied to the increase in the fair market value of outstanding warrants based on changes in the company’s stock price. Although the warrants will convert to equity when exercised, the loss on them comes against a gain of $6.1 million in last year’s quarter.
Stripping out interest and warrant liability along with other items, the company said consolidated adjusted earnings before interest, taxes, depreciation and amortization more than doubled to $13.3 million from $6.4 million a year ago.
“EBITDA performance for the 12 months ended Sept. 30, 2012, was $28 million or double that reported for the full year in 2011,” said Dov Charney, chairman and chief executive officer of the financially troubled vertical retailer. “As we improve store productivity and aggressively grow our online and wholesale businesses, we expect operating expense leverage will allow us to continue to significantly grow EBITDA performance.”
However, the company lowered its projections for full-year EBITDA to a range of $36 million to $40 million based on the impact of Hurricane Sandy and investments in advertising and store technologies. The earlier guidance was for EBITDA of $36 million to $44 million.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast