BERLIN — A weak response to Escada Group’s fall and winter 2007 offering as well as delivery shifts for spring items resulted in a steep drop in pretax earnings for the first quarter.

For the quarter ended Jan. 31, earnings before interest, taxes, depreciation and amortization fell 68.5 percent to 6.8 million euros, or $10 million, on a sales decline of 11.8 percent to 142.1 million euros, or $208.1 million. Dollar figures are at the average exchange rate.

The consolidated loss after taxes and minority interests came in at 3.9 million euros, or $5.7 million, which compares with earnings of 12.6 million euros, or $18.5 million, in the prior year.

In December, the German fashion house warned of a weak first quarter.

Escada attributed the declines to weak response to the fall-winter 2007 collection, which had already started to negatively impact results in the prior quarter. The first quarter was also affected by delivery shifts of what the firm said were strong spring-summer product groups into the second quarter, the fourth quarter shipment of the Escada Sport cruise collection and weak response to the Primera Group’s Apriori and Biba fall-winter collections.

The Escada business unit saw sales slip 13.4 percent to 96.6 million euros, or $141.5 million, while EBITDA fell 65 percent to 5.6 million euros, or $8.2 million. Primera’s EBITDA plunged 78.6 percent to 1.2 million euros, or $1.8 million.

Despite this performance, the board confirmed its full-year forecast, which calls for lower single-digit growth in consolidated sales and group EBITDA, as well as a positive result after taxes. The “Escada Excellence” program to step up sales growth and profitability is “well on track,” the company said, noting orders for fall-winter 2008-2009 are up 7 percent.

This story first appeared in the March 3, 2008 issue of WWD. Subscribe Today.