CHIC PROFITS GAIN IN YEAR, SALES RISE 16.3 PERCENT
NEW YORK — Chic by HIS, manufacturer of denim jeans for the mass market, reported a sharp rise in profits in the year ended Nov. 6.
Chic earned $10.5 million, or $1.08 a share, after $4.2 million in accounting charges, for the year. A year ago, earnings were $5 million, or 69 cents. This was after a charge of $770,000 for debt-retirement.
Gross profit rose 9.9 percent to $85.5 million from $77.8 million, as gross margins declined to 24.1 percent of sales from 25.6 percent. Sales climbed 16.3 percent to $354.2 million from $304.6 million. John Chin, chief financial officer, declined to break out fourth-quarter figures.
He said the company is optimistic going into the new fiscal year, pointing out that order backlog was up 59 percent to $248.3 million at the end of the year.
Robert Luehrs, president of Chic, said the company expects higher volume in women’s shorts in 1995. Luehrs further noted that the company will develop wrinkle-resistant offerings in its Chic women’s brand as well as in its HIS men’s brands. However, he cautioned there may be pressure on margins.
“We’re planning substantial sales increases, but margins and sales at retail are the question,” he said.
Luehrs said the company plans continued growth in Europe. Last year, Chic by HIS in Europe racked up volume of approximately $70 million.
The company at the present time does all of its manufacturing in the U.S. However, Luehrs said, the firm is considering moving some operations to the Dominican Republic. “We can’t find enough production in America,” he said.
— Fairchild News Service