Hampshire Group Ltd. trimmed its first-quarter net loss slightly as the company’s transition to vertical integration through Rio Garment continued.
In the three months ended March 31, the New York-based marketer of men’s apparel posted a net loss of $5 million, or 74 cents a diluted share, rounding off to the same loss in the 2011 quarter, which in turn translated into a deficit of 90 cents a share because of a lower number of shares outstanding. The loss before interest, taxes, depreciation and amortization fell to $3.9 million from $4.3 million.
Sales increased to $22.6 million from $3.5 million in the year-ago period. The most recent quarter included $18.8 million from Rio Garment, the Honduran vertical production operation acquired in the third quarter of last year, and the 2011 quarter excludes revenues from the women’s business exited during the second quarter of the same year.
Heath Golden, president and chief executive officer of the firm, told WWD, “We finished the quarter remarkably close to where we expected to be and we’re looking forward to profitability in the not-too-distant future. We’re growing with accounts ranging from Wal-mart to Bloomingdale’s and seeing growth outside the U.S., too.”
The Scott James collection, Golden said, is continuing to expand its presence in better stores, including Bloomingdale’s. It will make its first appearance at Pitti Uomo this June and has reached an agreement covering Canadian distribution with a unit of Trimera Group, parent firm of Gottex.
He noted that first-quarter margins for Rio are lower than average, providing for upside later in the year, and that the company’s cost savings plan is on track to yield about $1 million a year in cost benefits.
Hampshire during the quarter picked up licenses for Dockers men’s tops and Panama Jack for men’s sportswear.
Asked if he was satisfied with Hampshire’s current brand portfolio, Golden said, “We’re not in an acquisitive mode, and licensing isn’t my first choice, even though it can provide low cost of entry. But if there was something allowing us to leverage our design talent for different retailers and at different price points, we’d certainly consider it.”