A noncash impairment charge pushed Oxford Industries Inc. to a fourth-quarter net loss of $281.6 million, or $18.17 a diluted share, compared with profits of $5.9 million, or 36 cents a year earlier.
This story first appeared in the March 31, 2009 issue of WWD. Subscribe Today.
Net sales for the quarter ended Jan. 31 fell 23.7 percent to $199.9 million from $261.9 million a year ago.
The marketer of Tommy Bahama, Ben Sherman and Arnold Brant recorded a $311.5 million noncash impairment of goodwill, intangible assets and investments in joint ventures in the quarter, stemming primarily from a decline in its market capitalization.
Excluding the impairment charge and other one-time events, the company earned 6 cents a diluted share in the fourth quarter.
“While we are not satisfied with our results for the fourth quarter, there is no question that they have been impacted by perhaps the worst retail environment in the history of our company,” said J. Hicks Lanier, chairman and chief executive officer of the Atlanta-based company.
The company managed to maintain its gross margin rate while reducing inventories and debt levels and cutting costs and expenditures.
But the top line slumped across all divisions. Tommy Bahama sales slipped 15 percent in the quarter to $96.7 million, while Ben Sherman sales tumbled 28.2 percent to $26.2 million. Sales at the Lanier Clothes division, which includes Arnold Brant, decreased 27.4 percent to $24.4 million. The Oxford Apparel unit, which makes branded and private label sportswear, suffered a 32.9 percent sales decline to $52.3 million.
The company didn’t issue guidance for 2009 because of poor visibility tied to the economic environment. But Lanier said on a conference call with analysts that he expects sales to decrease “in the high teens” over the next 12 months, reflecting the recession, unfavorable exchange rates and the loss of underperforming businesses that were shed in 2008.
For the full year, Oxford reported a net loss of $265.8 million, or $17 a diluted share, compared with profits of $45.4 million, or $2.59 in the previous year. Sales for the year slipped 12.7 percent to $947.5 million.
Excluding impairment charges and one-time events, diluted earnings per share for fiscal 2008 was $1.44.
Cost-cutting measures are expected to reduce selling, general and administrative expenses by $40 million in 2009, and the company is also moderating its store rollout plan, with capital expenditures reduced to $10 million to $12 million this year, compared to $20.7 million last year.