A novelty printed bra and panty set by Nicole Miller Collection.

NEW YORK — Feeling the pressure of a quota-free market, Delta Galil reported a loss for the first quarter on revenues that gained 14 percent year-over-year.<BR><BR>The intimate apparel firm posted a net loss of $3 million, or 16 cents a diluted...

NEW YORK — Feeling the pressure of a quota-free market, Delta Galil reported a loss for the first quarter on revenues that gained 14 percent year-over-year.

The intimate apparel firm posted a net loss of $3 million, or 16 cents a diluted share, in the quarter ended March 31, which compares with net income of $4.1 million, or 22 cents, in the same period last year. Sales for the quarter rose to $173.5 million from $152.1 million last year.

The company said in its earnings report that — excluding sales from Burlen, which the firm acquired last December — revenues showed a 9 percent decline.

“The increase in sales in the first quarter of 2005 compared to the first quarter of 2004 is attributed to the consolidation of Burlen,” the company said in the statement. “This increase was partly offset by a decrease in sales to the North American and the European markets.”

Including sales of Burlen, total revenue in North America rose 36 percent. Total sales in Europe declined 10 percent while sales in the Israeli market gained 2 percent.

Arnon Tiberg, chief executive officer, said in a statement that the “main causes of the [first-quarter] loss were a decrease in sales and the erosion of selling prices to some of our customers, particularly in the European and the U.S. upper-market divisions.”

“We are in a period of major changes in the global business environment,” the ceo explained. “Following the elimination of quotas as part of the WTO agreement, the market has been characterized by strong pressure to lower prices, beyond our expectations, from most of our customers. Delta continues to evaluate how to cope with these changes by adjusting its production facilities, reducing cost of procurement and overhead.”

During the first quarter, the company said it “consolidated the results of Burlen, which contributed to the profit in Delta USA and helped to offset the losses from sales to certain customers in that market.”

Earlier this month, the Nicole Miller Collection of luxe lingerie was unveiled, which is produced under license by Delta Galil USA Inc., the U.S. unit of the Israel-based Delta Galil. The collection includes bras, panties, corsets and allover seamless daywear tops and briefs.

This story first appeared in the May 16, 2005 issue of WWD. Subscribe Today.

At the launch, Michael Fitzgerald, corporate senior vice president of business development at Delta Galil Industries, said a line of lingerie called Nicole Miller Signature is planned for next year, and will be aimed at specialty stores and high-end boutiques. Fitzgerald said both lines are expected to produce more than $20 million over the next five years.

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