The recession has had a slimming effect on nearly all businesses, including Oxford Industries Inc., which trimmed $21 million in expenses in the first quarter and said it would discontinue its Ben Sherman footwear and kids’ lines.
J. Hicks Lanier, chairman and chief executive officer, said footwear for the brand would be farmed out, but that the kids’ portion would suffer the fate of so many other auxiliary businesses in fashion.
“It was fun and cute, but there wasn’t a critical mass there,” Lanier said on a conference call with Wall Street. “In this environment, we didn’t have the luxury of ‘fun and cute’ without the financial reward.”
Oxford’s first-quarter profits fell 31.6 percent to $6.5 million, or 42 cents a diluted share, from $9.5 million, or 59 cents, a year ago. Sales for the quarter ended May 2 fell 20.6 percent to $216.7 million from $272.9 million. The Atlanta-based firm reduced selling, general and administrative expenses to $78.7 million from $99.6 million.
Profits far outstripped the 25 cents Wall Street had penciled in.
Ben Sherman had operating losses of $2 million, versus income of $300,000 a year earlier, on a 33.9 percent drop in sales to $24.2 million. The Ben Sherman business was hurt by a 26 percent drop in the average exchange rate between the pound and the dollar.
Oxford’s largest business, Tommy Bahama, recorded a 36.9 percent decline in operating income to $12.3 million on a 23.9 percent drop in sales to $98.4 million. The Oxford Apparel and Lanier Clothes units were both profitable on an operating basis.