Swank Inc. saw third-quarter profits dip despite an increase in sales.
In the three months ended Sept. 30, the New York-based men’s accessories firm registered net income of $1 million, or 18 cents a diluted share, down 9.8 percent from $1.1 million, or 20 cents, in the year-ago quarter.
Sales rose 2.5 percent to $33.4 million from $32.6 million in the 2010 quarter, with cost of goods sold and gross profit up at the same rate and gross margin flat at 31.4 percent of sales.
Selling, general and administrative costs rose slightly faster, up 4.3 percent to $8.6 million.
John Tulin, chairman and chief executive officer, characterized the small leather business as a standout for the quarter with belts and jewelry both performing well.
“If you can keep sales up a little, watch your expenses like crazy, fight the price increases coming out of Asia and hope that Italy and Greece don’t fold, you’ve got a chance,” he told WWD. “We’re doing our best to hold the line on SG&A, but we’re also trying to do the right thing by our employees, including a general wage increase and a bonus increase for the last four or five years, and doing our best to minimize any increases on medical expenses for them.”
He said SG&A also was hit by incidental expenses, such as business travel being shifted and a higher percentage of goods being flown in rather than sent by water.
Tulin doesn’t expect the tenor of business in the fiscal year’s final three months to change materially from the third quarter. “Everybody, including us, is watching their inventories like hawks,” he said, “treading that fine line between having the right amount of goods on the shelves and having too much on the shelves. Psychologically, it’s a little more threatening now because of everything else that’s going on in the world. This crisis is wider and deeper than anything we’ve seen in a long time, and it will be harder to navigate because there are so many intangibles.”
In the nine months, net income more than quadrupled to $2.5 million, or 45 cents a diluted share, from $611,000, or 11 cents, in the year-ago period. The year-ago period includes a pretax charge of $1.5 million in connection with the termination of Swank’s relationship with Style 365, and a benefit of $538,000 from a state income tax audit. Sales rose 4.6 percent to $91.7 million from $87.7 million with gross margin rising to 32.4 percent of sales from 29.2 percent in the 2010 period.
“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