FREDERICK’S EARNINGS SINK 89.6% IN QUARTER
LOS ANGELES — Frederick’s of Hollywood Inc. reported first-quarter earnings plummeted 89.6 percent to $107,000, or 1 cent a share, from $1 million, or 12 cents, a year ago.
Total sales for the three months ended Dec. 2 rose 1.6 percent to $36.6 million from $36 million. Same-store sales were down 2.5 percent.
The company’s stores reported an operating loss of $980,000, against an operating loss of $308,000 a year ago. Sales in the stores slipped 2.2 percent to $18.3 million.
Frederick’s mail-order subsidiary said sales were up 6 percent to $18.3 million from $17.3 million due to more catalog distribution. However, the division’s operating earnings fell 45.6 percent to $1.1 million from $2 million due to increased postage and paper costs.
“The retail environment for intimate apparel continues soft as we proceed into the second fiscal quarter,” Robert W. Townson, chairman and chief executive officer, said in a statement. “As with most retailers, the Christmas selling season was relatively weak for the stores, although we were pleased with results from our holiday catalog,” Towson continued.
At the close of the first quarter, Frederick’s operated 204 specialty apparel stores in 39 states and a mail order division serving the U.S. and Canada. The firm started distribution of its catalog in Canada in October.
The company is also testing separate swimwear catalogs in the U.S. and will continue to do so, Townson noted, as part of a strategy to enhance sales. — Fairchild News Service