NINE WEST’S ACCESSORIES SALES GAIN MOMENTUM
Byline: Catherine Curan
STAMFORD, Conn. — Accessories, while still a small part of the business at Nine West Group, is moving ahead fast for the footwear firm.
In the second quarter ended Aug. 2, Nine West accessories sales were up over 30 percent against the year-ago quarter, with a lightweight leather goods collection selling over 500,000 units, the firm reported in a conference call with analysts. For the third quarter, the company’s goal is to double sales over the year-ago quarter. Of the total business at Nine West, accessories comprise slightly above 5 percent, including accessories sold in Nine West stores, executives said.
The conference call was to discuss second-quarter profits, which jumped 14.3 percent, but the firm lowered its third-quarter forecast because of a tough retail climate and high interest costs.
In the second quarter ended Aug. 2, Nine West earned $29.5 million, or 79 cents a share, against income from continuing operations of $25.8 million, or 69 cents, a year ago. Profits in the latest period include results of The Shoe Studio Group Limited for the 10 weeks following its acquisition. Year-ago net totaled $23.1 million, or 63 cents, after a $2.6 million charge for discontinued operations.
Total sales moved ahead 17.6 percent to $495.7 million from $421.5 million. Same-store sales inched up 1.8 percent.
Looking ahead, the company said it expects earnings per share in a range from 97 cents to $1.02 for the third quarter, against previous analysts’ estimates of $1.04 per share.
Among its various accessories products, sunglasses sold well in the second quarter, and the company said it was the number-two sunglass resource for Federated Department Stores and May Department Stores Co. this spring.
In the conference call, the company also said its licensed CK Calvin Klein business did well in the quarter, and the reaction to early fall footwear and accessories is very positive. The first freestanding CK Calvin Klein footwear and accessories store is on track to open this month in Troy, Mich., with two more slated to bow in November, in Aventura, Fla., and Garden State Plaza, Paramus, N.J.
Initial plans for the spring ’98 launch of a Nine West jewelry line have been accelerated. The line will be in 650 doors rather than 425, and the plan to penetrate 1,200 doors by spring ’99 has been moved ahead to fall ’98.
Commenting on the revised earnings-per-share forecast for the third quarter, Nine West blamed softness in the retail environment and significantly weaker-than-expected results of the retail operations in August. The weak results are expected to continue to some extent during the remainder of the quarter, the company said.
In the half, earnings gained 21.5 percent to $46.4 million, or $1.27 a share, from $38.2 million, or $1.04. Sales were up 16 percent to $901.8 million from $777.4 million.