Declining retail business and Mervyns’ bankruptcy resulted in a third-quarter drop in profits for Tarrant Apparel Group.
In the quarter ended Sept. 30, the Los Angeles-based design and sourcing firm reported an 87.2 percent slide in net income to $207,000, or 1 cent a diluted share, compared with $1.6 million, or 5 cents a share, in last year’s quarter. Sales in the period fell 20.3 percent to $56 million from $70.2 million a year ago.
Tarrant said both private label and private brand sales fell in the quarter. Private brand revenues dropped to $10.2 million from $12 million in the year-ago quarter, primarily because of lower sales of the American Rag Cie brand to Macy’s.
“The bankruptcy of Mervyns LLC during the third quarter and very challenging conditions for retailers contributed to a difficult operating environment,” said Gerard Guez, chairman and interim chief executive officer. “We continued to focus on those areas of operations that we believe we can control. The company has reduced expenses through staff reductions, and continues to closely monitor its sourcing and inventory management to reduce costs there as well.”
Tarrant reduced selling and distribution expenses by 35 percent to $2.4 million from $3.8 million. General and administrative expenses, however, rose 11.2 percent to $6.8 million from $6.1 million, partly because of an additional allowance for bad debt related to the Mervyns bankruptcy.
For the first nine months of fiscal 2008, the company posted a loss of $5.3 million, or 17 cents a share, versus a profit of $1.4 million, or 5 cents a share, a year ago. Revenues in the three quarters fell 15.4 percent to $157.8 million compared with $186.4 million last year.
The net loss for the nine months included a goodwill impairment charge of $5.3 million related to the company’s Chazzz division, which had considered Mervyns and another unspecified faltering retailer major customers, the company said.
In April, Guez and co-founder Todd Kay proposed acquiring the company’s outstanding publicly held shares. The offer is pending.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@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)