STARTER LOSES $3.8M IN QUARTER
NEW HAVEN, Conn. — Hurt by lower gross margins, Starter Corp. lost $3.8 million in the fourth quarter after a restructuring charge of $740,000. In the year-ago quarter, the company lost $2.7 million.
Sales for the maker of activewear, including a broad range of sports-licensed apparel, jumped 43.3 percent to $113.3 million from $79.1 million in the three months ended Dec. 31.
The company said the $740,000 charge was related to the closing of the Century, Fla., manufacturing plant.
In a statement, David A. Beckerman, chairman and chief executive officer, attributed increased sales to the inclusion of $19 million in sales from Starter Galt, acquired in August.
Beckerman added, “The higher loss in the fourth quarter was a result of lower gross margins, which declined from 31.8 percent to 26 percent, primarily due to our decision to significantly reduce inventory levels.”
For the year, earnings grew 53.5 percent to $1.9 million, or 7 cents a share, from $1.2 million, or 5 cents a share. Sales gained 11.7 percent to $405.96 million from $363.4 million.
Beckerman said he expects sales for the first half of 1997 to be hurt by “softening market conditions, ” and results for the period may be lower than the first half of 1996.
In addition, Beckerman announced the Dec. 31 acquisition of Starter Benelux, a European distributor that will provide distribution and advertising in Europe.