NEW YORK -- In the midst of a $240 million effort to buy Italy's GFT SpA, first quarter earnings and sales at Plaid Clothing Group were down sharply.

A report sent to Plaid bondholders and filed with the Securities and Exchange Commission, said net income for the quarter ended April 3 fell 72 percent to $746,000 from $2.7 million. Sales fell 13.4 percent to $72.7 million.

Management said the year-ago quarter was especially strong while the latest quarter was hurt by a poor retail environment and bad weather. Plaid bonds, which are rarely traded, are quoted at 95 to 96 cents on the dollar. In March, Plaid signed a letter of intent to acquire GFT, but the acquisition has been moving slowly. A deadline for a definitive agreement was set for May 15, and the deal was scheduled to be completed by June 30. The May 15 deadline was extended to July 15.

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