NEW YORK--Victoria Creations, which has been struggling for years to return to the black, managed an operating profit and halved its net loss in the fiscal year ended June 30.
The costume jewelry firm reported an operating profit of $183,000 compared with an operating loss of $981,000 in the prior year. The net loss narrowed to $2.1 million from $4.2 million in fiscal 1993. Sales inched ahead about 1 percent to $42.6 million from $42.2 million.The company did not break out fourth quarter figures but noted that sales were flat in the quarter.
Referring to the full year, the company said U.S. consumer interest remained strong for the company's Givenchy, Richelieu and Lagerfeld branded merchandise. Sales of private label merchandise also increased, the company said.
Gross profit was up 5 percent over 1993, reflecting manufacturing and purchasing efficiencies, the company said, adding that selling, general and administrative expenses dipped $350,000 to $18.6 million as a result of strict controls.
Victoria Creations is 79 percent owned by United Merchants & Manufacturers Inc.
Meanwhile, UM&M reported a sharply reduced loss in the year ended June 30, but its independent auditors said recurring losses raised "substantial doubt" that the company can continue as a going concern.
UM&M, which has been losing money for a decade, cut its loss to $752,000 in the year from $25.2 million.
The net loss in the latest year is after a $33.4 million gain from a debt refinancing and a $15.3 million accounting charge for post-retirement benefits. The results for the latest year also include a gain of $4.4 million from discontinued operations against a loss of $2.2 million from these operations in fiscal 1993.
Losses from continuing operations totaled $23.2 million against a loss of $23 million.
Sales slid 9.3 percent to $98.3 million from $108.4 million. The company noted that the decline in sales reflected lower sales of its gray goods business and its retail outlet operation.
The operating loss in the latest and prior years were about the same, $11.7 million. The company said the effect of the decline in its own sales was offset by improved results at Victoria Creations and lower corporate expenses.
UM&M said a report by its auditors on the company's 1994 financial statements states "recurring losses from operations, net deficiencies in stockholders' equity and the significant debt raise substantial doubt about the company's ability to continue as a going concern."
The company said it continues to reduce debt by selling assets or refinancing with better rates in efforts to eliminate its senior secured debt entirely. UM&M also said it is shifting the focus of the business to financial services and has taken steps to establish a reinsurance business.--Fairchild News Service

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus