NEW YORK — Warnaco Group Inc. posted second-quarter results that substantially narrowed its losses from the year-ago period, according to a Securities and Exchange Commission filing Thursday.
This story first appeared in the October 25, 2002 issue of WWD. Subscribe Today.
For the three months ended July 6, the apparel giant lost $32 million, or 60 cents per share, compared with losses of $338.4 million, or $6.40, a year ago. Revenue rose 5.38 percent to $381.8 million from $362.3 million.
Warnaco, which filed its proposed reorganization plan and disclosure statement with the Manhattan bankruptcy court earlier this month, is awaiting court approval on the adequacy of the information provided in the court documents. If it is granted at a Nov. 13 hearing, Warnaco can then start soliciting acceptances from creditors on the plan. As reported, the firm plans to exit bankruptcy proceedings early next year.
Meanwhile, Warnaco said in its SEC filing that it continues to “evaluate the company’s operations and may identify additional assets for potential disposition.” Warnaco has said previously that while it is required to entertain proposals, its plan is to exit bankruptcy as a stand-alone firm.
The company’s operations are concentrated into three segments: sportswear and swimwear, intimate apparel and retail stores.
Revenues for the sportswear and swimwear group in the quarter rose 3.8 percent to $208.7 million from $201.1 million. The intimate apparel segment increased 28 percent to $145.3 million from $113.5 million.
The retail division, which is comprised of outlet and full-price stores, dropped 41.9 percent to $27.7 million from $47.7 million. The full-price stores operate under the Speedo/Authentic Fitness name, while the outlet stores dispose of excess and irregular inventory under various company brand names, including Warner’s, Olga’s, Calvin Klein and Chaps by Ralph Lauren.
At the end of the quarter the company operated 71 Speedo/Authentic Fitness stores, but since then has closed an additional 23 Speedo/Authentic Fitness stores, leaving it with 48 stores. The SEC filing said Warnaco will shutter the remaining 26 domestic outlet retail stores by the end of 2002.
As reported, SEC staff has indicated to Warnaco it is recommending the filing of a civil lawsuit against the firm and certain individuals in connection with the preparation of certain previous financial statements. The company filed its response — the Wells submission — in September, but said in Thursday’s regulatory filing that it “does not expect the resolution of this matter as to the company to have a material effect on the company’s financial condition, results of operations or its business.”
For the six months, Warnaco’s losses skyrocketed to $889.7 million, or $16.81 per share, from $402 million, or $7.60, a year ago. Excluding the cumulative effect of a first-quarter change in accounting principle of $801.6 million, however, the loss for the more recent six months would have been $88.1 million. Revenues were down 8.1 percent to $791.8 million from $861.5 million.