NEW YORK — The turnaround campaign at I.C. Isaacs continued to pick up momentum during the first quarter.

For the three months ended March 31, the New York-based denim company, which holds the U.S. license for Marithe & Francois Girbaud, saw earnings skyrocket 189.4 percent to $2.5 million, or 18 cents a diluted share, compared with earnings of $865,000, or 7 cents, in the same period a year ago.

Sales increased 14.1 percent to $23.7 million from $20.8 million. According to Peter Rizzo, chairman and chief executive officer, sales gains are being fueled by the introduction of a wider array of product offerings.

“We’re collection-driven now,” said Rizzo. “We’re not only T-shirts and denim.”

Significant improvements in cost of sales also beefed up the bottom line. Cost of sales sank 710 basis points to 58 percent of sales, compared with 65.1 percent of sales in the year-ago quarter.

The company has also made changes in its supply chain that have improved costs and given the company some protection through sourcing diversity.

“We were only sourcing out of Asia for denim,” said Rizzo. “Now we’re working with factories in California and Mexico.”

Rizzo and a new design team are focused on developing a girls’ teen concept for the mass retail channel, an area that Rizzo believes has been largely ignored.

“There’s a lot of excitement in the girls’ teen business. Those numbers have been astonishing,” said Rizzo, referring to the success of specialty retailers such as Abercrombie & Fitch and Aeropostale in recent years. “We’re going to start working on a mass teen product that will give the department stores something that will allow them to go head-to-head with teen specialty retailers.”

To that end, the company has retooled the teen line in an effort to get away from its traditional urban image. The goal, said Rizzo, is to provide more contemporary offerings so that the teen line will complement a premium women’s line set to launch in the fall of 2006.

“Denim is a big part of our business and the brand is known for that, but there’s a whole world of items that will support the denim lifestyle,” said Rizzo.

This story first appeared in the May 19, 2005 issue of WWD. Subscribe Today.

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