Hollywood—Frederick’s of Hollywood Group Inc. reported Tuesday afternoon that it swung into a larger net loss in the first quarter, hit by marketing and inventory challenges.
For the quarter ended Oct. 26, the lingerie and accessories retailer posted a net loss of $7.7 million, 20 cents a share, compared with a net loss of $5.2 million, or 13 cents a share, in the year-ago quarter.
Net sales decreased 12.1% to $19.7 million from $22.5 million while comparable store sales were down 11.7%. Total store sales declined 15.2% to $12.9 million and direct sales (including online, catalog) were flat.
Other revenue decreased by $400,000, or 53.8%, primarily due to a decrease in shipping revenue due to an increase in online promotional shipping offers.
“The results for the first quarter of fiscal 2014 reflect certain marketing and inventory challenges faced during the period,” said Thomas Lynch, chairman/ceo. “These have been ongoing challenges associated with the financial limitations of the business over the past several years. We are working with our lenders, manufacturers and partners to overcome these challenges, as well as to implement a long-term strategy for enhancing our business and driving future growth.”
Gross margin, as a percentage of net sales, was 21.4% as compared to 27% in the same quarter last year.
Selling, general and administrative expenses decreased to $9.9 million, or 50% of sales, from $10.1 million, or 44.9% of sales last year.
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