G-III Apparel Group Ltd. said Wednesday its Wilsons outlet retail business hampered first-quarter results, but strength in the growing women’s sportswear and dress businesses allowed it to post a smaller-than-expected loss.

This story first appeared in the June 4, 2009 issue of WWD. Subscribe Today.

For the three months ended April 30, the New York-based vendor reported a net loss of $6.8 million, or 41 cents a diluted share, compared with a net loss of $6.9 million, or 42 cents, in the year-ago quarter. Revenue grew 53.8 percent to $115.9 million from $75.4 million. On average, analysts polled by Yahoo Finance were looking for a net loss of 51 cents on sales of $103.8 million.

G-III, which holds licenses for brands such as Calvin Klein and Kenneth Cole, said its gross margin increased to 26.9 percent of sales, versus 23.3 percent in 2008.

Like many of its rivals, G-III has been cutting costs and controlling inventory to cope with the economic downturn. However, the company said losses associated with the acquisition of its Wilsons business weighed down results.

G-III chairman and chief executive officer Morris Goldfarb said on the company call to analysts, “We’ve made improvements since acquiring Wilsons last July. We believe this will become an important and productive piece of

our business.”

Goldfarb said Wilsons is in “liquidation mode” with its accessories inventory, which should pay dividends during the second half of 2009. Although Goldfarb said he had “modest” expectations of Wilsons breaking even for the year, he was optimistic about G-III’s future growth.

“Challenging times and significant opportunities go hand-in-hand,” he said.

For the second quarter, G-III forecast a net loss of $4.8 million to $5.4 million, or between 28 and 32 cents a share. Revenue is expected to be about $135 million. Analysts anticipated a net loss of 30 cents on sales of $130.7 million.

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