Perry Ellis International Inc. is closing its Tricots St. Raphael and Axis brands and ending its Dockers outerwear and Ping golfwear licenses as part of a strategic review to close underperforming businesses.
However, the Miami-based company has added Callaway to its stable of brands, and will design, manufacture and market golfwear and sportswear apparel under the name in the U.S., Canada, Latin America and the Caribbean, beginning with the spring 2010 season.
The moves were made as PEI on Thursday reported a fourth-quarter net loss of $21.6 million, or $1.58 a diluted share, compared with net income of $9.9 million, or 65 cents, in the year-ago period. The loss included a pretax, noncash charge of $22.3 million, or $1.17 a share, to reduce the appraised value of some of its brand trademarks. Excluding this impairment and other onetime items, the net loss in the quarter was $4.6 million, or 34 cents.
Total revenue in the quarter ended Jan. 31 dipped 9.9 percent to $191.2 million from $212.3 million a year ago.
Shares of PEI fell 68 cents, or 14.7 percent, to close at $3.95 on Thursday.
“Our worst year in business finally came to an end,” chairman and chief executive officer George Feldenkreis said on a conference call with analysts.
He noted that the deteriorating economy and weak performances by the company’s retail, U.K., private label bottoms and women’s contemporary businesses contributed to the poor results. However, PEI’s core men’s department store labels, Hispanic brands and golf and swim divisions are fundamentally strong, and the company continues to seek attractive merger and acquisition targets, said Oscar Feldenkreis, president and chief operating officer.
For the full year, PEI reported a net loss of $12.9 million, or 89 cents, compared with net income of $28.2 million, or $1.80, a year ago. Revenue for the year slipped 1.5 percent to $851.3 million.
The decision to exit the Tricots St. Raphael and Axis brands that served the traditional specialty store market was made because of the refusal of factors to finance shipments to that channel and the closure of many independent men’s stores in the recession. Full-year sales from those two brands had declined to $12 million, down from $20 million in the previous year. Similarly, the licensed Dockers outerwear and Ping golfwear businesses were not meeting company expectations, and those licenses will expire this year. The company said in November it was initiating a review of weaker businesses and singled out men’s specialty store brands as one of the areas to be studied.
PEI is not issuing specific guidance for 2009, but said it expects to be profitable in the first quarter. Full-year revenue is forecast to be down in the high single- to low double-digit range.