Kenneth Cole Posts Q2 Loss

In What's New, Industry News by Accessories Staff

New York—Kenneth Cole Productions today reported that it swung into a second quarter loss due to a sales decline and mounting costs.

For the quarter ended June 30, the company posted a net loss of $3.7 million, or 20 cents a share, compared with a profit of $579,000, or 3 cents a share, a year ago. Excluding expenses relating to a new distribution center and costs associated with founder Kenneth Cole’s purchase of the company, adjusted loss would be 3 cents a share.

In June, Kenneth Cole, the company’s founder, chairman and chief creative officer, struck a deal to buy stock he doesn’t already own for $15.25 a share, about a $245 million deal.

Total revenue declined 5% to $97.3 million. Revenue at its wholesale division edged down 3% to $50.3 million primarily from private label footwear and Reaction handbags.

In its direct to consumer business, Kenneth Cole posted a 6.1% sales decline to $37.2 million as of its stores were closed. Comparable store sales declined 2.7%.

Licensing revenues declined 7.8% to $9.8 million as the company took its women’s apparel business in-house and reset the contractual minimum royalties of a licensee.

Once Kenneth Cole’s buyout is completed, Kenneth Cole Productions will be a private company again.


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