REEBOK AIMS FOR GROWTH IN 2001
NEW YORK — While footwear is on the mend, Reebok International Ltd. said Tuesday it doesn’t expect sales of its U.S apparel business to start growing again until 2001.
Sales in its U.S. apparel division fell 15.4 percent in the first quarter ended March 31, and U.S. backlogs for apparel — which includes the Reebok brand and Greg Norman — for delivery between April and September are down 29 percent.
However, Kenneth I. Watchmaker, executive vice president, chief financial officer and treasurer, said on a conference call that good inventory management and a reduction in underperforming doors boosted profits 300 percent in the quarter for the segment. Gross margins improved 1,000 basis points while expenses were reduced 27 percent, but Watchmaker said the firm is striving to lift the top line.
“We’re working hard to build back a quality apparel business in the U.S. with key strategic partners,” said Watchmaker. “We’ve initiated greater product segmentation with key special retailers programs. This, along with a new focus on women’s, classics and [Alan] Iverson, is creating increasing sell-throughs and improved retailer confidence in apparel. However, we don’t expect to see sales increases from this business segment until 2001.”
Reebok’s U.S. apparel sales declined 29.9 percent in 1999, to $253.8 million, due to slack demand for branded athletic apparel.
Overall, Reebok’s first-quarter profits vaulted 77.1 percent to $31.7 million, or 56 cents a share, from $17.9 million, or 32 cents a share, a year ago. Sales dipped 2 percent to $769.8 million from $785.8 million.
U.S. Reebok brand footwear sales were down 3 percent to $258.2 million, while sales of the Reebok brand internationally — including both footwear and apparel — nudged up 2.7 percent. Apparel accounted for 40 percent of Reebok brand sales internationally.