SIRENA SHOWS LOSS IN QUARTER
LOS ANGELES — Stung by a 29.5 percent decline in sales, Sirena Apparel Group Inc. reported a loss of $2.2 million in the first quarter ended Sept. 30.
In the year-ago quarter, the swimwear manufacturer lost $916,000 after a $493,000 income tax gain.
Sirena noted that due to the seasonality of its business, it typically reports a loss in the first quarter.
Sales in the latest quarter sank to $2.2 million from $3.1 million.
“The company’s decline in sales and the increase in net loss for the first quarter was a direct result of not manufacturing promotional programs for leading discounters in the first quarter, as had been the case in prior years,” Douglas Arbetman, president and chief executive officer, said in a statement.
He added that lower prices paid by such discounters for closeout merchandise and lower levels of production also contributed to Sirena’s weaker performance.
“The ample supply of existing season inventory available in the marketplace to discounters has negated their need this year for higher-priced promotional merchandise,” Arbetman said. This and greater efforts to control inventory hurt gross margins, he added.
“However at this time of the year, given a choice between higher margins and leaner inventory, we will choose the latter,” he said.
Net inventory at the end of the period fell to $9.1 million compared from $10.7 million a year ago. Inventory of prior-season merchandise has been reduced by 47 percent from June 30.
Sirena manufactures branded and private label swimwear and resortwear. Its brands include Anne Klein, Sirena, Hot Water, Rose Marie Reid, WearAbouts and Sirena.