DESIGNS INC. PROFITS SLIP IN QUARTER
NEW YORK — Third-quarter profits at Designs Inc., retailer of Levi Strauss & Co. and Boston Traders apparel, fell 7.4 percent to $4.7 million, or 30 cents a share, from $5 million, or 32 cents.
Gross margins were down slightly to 32.5 percent of sales from 32.9 percent.
Sales in the quarter ended Nov. 2 slid 4.8 percent to $85 million from $89.2 million, and same-store sales declined 4 percent.
Joel H. Reichman, president and chief executive officer, said that with the Boston Traders lines, the company completed its second delivery of its branded private label line of casual apparel. “Our next strategic step is to create an identity for the Boston Traders brand and generate customer demand for Boston Traders brand clothing,” he added.
Designs plans to open its first Boston Trading Co. stores during the first quarter 1997 and has signed leases for five locations. Four are in malls in Miami, Atlanta, Braintree and Natick, Mass.; the fifth is in Boston. The company also plans to open as many as 10 additional Boston Trading stores in 1997.
During the quarter, the joint venture between subsidiaries of Designs and Levi’s Only Stores Inc. opened two “Levi’s Outlet” stores, in Queenstown, Md., and Waterloo, N.Y. These openings conclude the company’s-store opening plan for the current year. The company also closed four Boston Traders Outlet stores and one Designs store .
“Looking ahead to the upcoming holiday season, we believe that we are well positioned in a competitive marketplace, particularly in light of the five fewer shopping days this season,” said Reichman.
In the nine months, profits sank 47.9 percent to $4.1 million, or 26 cents, from $7.8 million, or 50 cents. The year-ago period included a $2.2 million pretax gain related to Designs fiscal 1993 restructuring program.
Sales dipped 1.3 percent to $210.8 million from $213.5 million, and same-store sales dropped 6 percent.
Designs operates 150 stores under several formats including 58 Levi’s Outlet by Designs stores, 11 Original Levi’s Stores and 10 Levi’s Outlet stores .