NEW YORK — As Bernard Chaus Inc. reported sharply heavier losses for its third quarter Friday, Josephine Chaus, president and chief executive officer, said she has personally provided a $3 million letter of credit to support the company’s credit facility.
The company said it has received waivers of certain covenants in its loan agreement for the quarter and negotiations are still under way to work out future financing.
For the third quarter ended March 31, the firm posted a net loss of $6.8 million, against a loss of $3.6 million a year earlier. The company said it expected losses to continue in the fourth quarter as well.
Josephine Chaus said the larger loss stemmed from markdowns and declines in sales, but she noted inventory has been cut.
Inventory levels were down to $27.8 million at the end of the quarter, from $45.6 million a year ago.
Chaus also said this year’s fall merchandise has been better received than last year’s.
Although Josephine Chaus does project a fourth-quarter loss, she also pointed out that the combination of fall bookings and inventory reduction will improve the company’s bottom line in the September quarter.
In the nine months, losses widened to $17.1 million from $1.1 million. Sales were down 6 percent, to $170.2 million from $181.2 million.
As of the end of the quarter, cash on hand had dropped to $568,000 from $1.3 million a year ago, and working capital fell to $28.4 million from $46 million. Shareholder equity was down to $16.1 million from $43.1 million a year earlier.