WOOL COATS UNRAVEL FORSTMANN QUARTER
NEW YORK — While fabrics for women’s sportswear are a bright spot, the slowdown in the women’s wool coat business last fall sharply dented Forstmann & Co.’s bottom line.
Hit by rising wool costs and interest rates as well as declining demand for woolens for women’s coats, Forstmann’s fourth-quarter loss widened to $3.1 million from $22,000 a year earlier.
Sales for the quarter ended Oct. 30 inched up 2.9 percent to $54 million from $52.5 million. Gross margin fell to 11.7 percent of sales from 19.5 percent.
William B. Towne, executive vice president and chief financial officer, said the company also expects to post a loss for the first quarter, traditionally a loss period. However, he expressed overall optimism, noting, “Most of our markets are pretty good. Flannel had come back to normal this season; women’s sportswear is doing well. Only women’s wool coating remains slow.” The lagging sector makes up about 20 to 25 percent of sales.
In the year, earnings dropped 48 percent to $3.3 million, or 60 cents a share, from $6.4 million, or $1.15, in the prior year. Sales nudged up 1.6 percent to $237 million from $233.4 million. Gross margin declined to 20.2 percent of sales from 21.9 percent.
Christopher L. Schaller, chairman, president and chief executive officer, said, “While we certainly are disappointed with our financial results for fiscal 1994, they are in line with our previous indications.” On Nov. 18, Forstmann forecast 1994 earnings would be about 50 cents to 60 cents a share. — Fairchild News Service