DONNKENNY SALES SLIDE FOR QUARTER
NEW YORK — Donnkenny Inc. lost $3.5 million in the first quarter ended March 31, against earnings of $1.5 million, or 43 cents a share, a year ago.
Sales fell 17 percent to $42.4 million from $51.2 million. Sales fell $5 million under the Victoria Jones label, $3.7 million under Donnkenny and $1.7 million under Casey & Max. Pierre Cardin sales gained $1.7 million.
About $2 million of the Victoria Jones decline stemmed from the discontinuation of a one-time program with a major customer, while the Donnkenny drop was primarily due to the planned exit of the coordinates business.
The higher loss also stemmed from idle domestic plant capacity costs, the sell-off of old inventories and higher transportation costs from imports.
Daniel H. Levy, chairman and chief executive, said that while results were “unsatisfactory,” they were in line with internal operating and financial plans. He noted that the impact of previously announced domestic plant closings, projected to cut operating costs by more than $5 million annually, will not be fully reflected until the second half.
“With these and other changes, the company is well situated to pursue strategic alternatives and the development of new lines of merchandise,” said Levy.
Donnkenny makes moderately priced women’s and children’s wear. Its largest customers last year were Wal-Mart, accounting for 16 percent of sales, and J.C. Penney, 11 percent.