Increased royalties and lower overhead expenses led Cherokee Inc. to nearly double profits in the third quarter.
The company reported that improved sales of products licensed to Target in the U.S. and Zellers in Canada more than offset steep declines from its business with Tesco in Europe.
“With regard to Tesco, we continue to see strong progress in the relaunch of Cherokee and expect to see improved revenues from this relationship” during the first quarter of the next fiscal year, said Henry Stupp, chief executive officer. “In addition, we are gratified to say that we continued to see an uptick in sales at Target for our Cherokee brand, with year-to-date revenues increasing 19.2 percent year-over-year.”
According to the quarterly report filed with the Securities and Exchange Commission, retail sales of Cherokee products at Target stores totaled $276.4 million, 13.1 percent above the $244.5 million registered during the comparable 2011 quarter. Sales at Tesco were down 93 percent, to $1.6 million from $22.2 million.
For the three months ended Oct. 27, net income rose 98 percent to $2.1 million, or 25 cents a diluted share, from $1 million, or 12 cents, in the year-ago period. Revenues, all derived from royalty payments, grew 11.9 percent to $6.7 million from $6 million in the 2011 quarter. Selling, general and administrative expenses declined 18.9 percent to $3.4 million during the period from $4.2 million a year ago.
The integration of the Liz Lange Maternity and Completely Me brands acquired from Bluestar Alliance for $14 million in September “is now fully complete, and we are currently working to build the brand with both Target and HSN while aggressively seeking new business opportunities internationally.”
At the time of the acquisition, Stupp told WWD that Cherokee believes it has an opportunity to establish partnerships for the Lange brands in the nearly 40 countries in which it does business.
“We expect the remainder of fiscal 2013 to show positive results for the company while we continue to refine our operating model,” the ceo said. “In addition, we will continue to seek new, successful brands to build our portfolio.”
For the nine months, net income slipped 3.6 percent to $5.8 million, or 69 cents a diluted share, while royalty revenues grew 4.8 percent to $20.6 million.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews