WARM WEATHER, SPORTS PROBLEMS STRIKE STARTER
NEW HAVEN, Conn. — Starter Corp. lost $15.7 million in the fourth quarter after $14 million in inventory write-downs caused by the baseball strike and hockey lockout.
The licensed sports outerwear and activewear manufacturer had projected a “material loss” in October due to the baseball and hockey shutdowns. The company expects to continue in the red for the first half of 1995, but predicted a return to profitability in the year. Starter earned $1.9 million, or 7 cents a share, in the year-ago quarter.
In the latest quarter, gross margins fell to 14.9 percent from 35.6 percent, reflecting inventory write-downs, increased distribution costs and markdown pressure. Sales were about flat at $79.4 million.
In the year ended Dec. 31, Starter lost $4.8 million against income of $26.4 million, or 98 cents, in 1993. Sales were up 5.5 percent to $379.5 million from $359.9 million. Gross margins dropped to 29.6 percent from 37.7 percent.
David A. Beckerman, chairman and chief executive officer, noted that in addition to the sports problems, the warm fall adversely affected outerwear sales at retail.
Selling, general and administrative expenses were up in both the quarter and the year due to inventory write-downs, additional advertising and promotional costs, and professional fees.
Shares of Starter closed Wednesday at 8 5/8, unchanged on the New York Stock Exchange. — Fairchild News Service