DONNKENNY NARROWS LOSS IN 4TH QUARTER
NEW YORK — Donnkenny Inc. sliced its fourth-quarter loss to $2.8 million from $4.9 million.
Sales dipped 5.5 percent to $43 million from $45.5 million. Gross margins rose to 15.9 percent of sales from 11.9 percent. The year-ago quarter includes a $1.2 million charge to close outlets, consolidate offices, cancel leases and cover computer installations.
For the year, the women’s moderate-price apparel maker lost $9.4 million after a $5.9 million litigation charge. Last year the firm agreed to pay $10 million to settle lawsuits over accounting irregularities in 1996. Former chief executive Richard Rubin pled guilty to conspiracy to commit securities fraud.
Excluding the charge, the loss narrowed to $3.5 million from $4.1 million. Sales slumped 12.2 percent to $173.7 million from $197.9 million.
Daniel H. Levy, chairman and chief executive, said the sales drop stemmed from the planned exit from the coordinate business, the closing of its outlets and the exit from its licensed character business, including Mickey & Co.
In its 10K, the firm said the loss reflected a competitive retail climate for nonmajor branded products, higher domestic manufacturing variances due to decreased sales in the Donnkenny label and higher transportation costs.
Among its brands, sales dropped $8.7 million in the Donnkenny label, $5.5 million in Victoria Jones and $6.6 million in Pierre Cardin, but gained $2.1 million in Casey & Max.