US: Cache optimistic despite Q2 losses
- Q2 net loss widens to $7.9m
- Gross margin narrows to 31.6%
- Net sales fall 10%
US women's wear retailer Cache said it is encouraged by the performance of its business at the beginning of the second half, despite reporting a widening of net losses in the second quarter.
Net losses totalled US$7.9m in the three months ended 28 June, compared to a loss of $1.6m in the year ago period. The company said it was hit with employee separation charges of $956,000 in the period.
Gross margin narrowed to 31.6% from 37.3% last year, primarily driven by the de-leverage of fixed occupancy expenses given lower sales, compared to the prior year.
Net sales dropped 10% to $54.1m, while comparable store sales slid 8.8%.
CEO Jay Margolis, said: "While disappointed in our second quarter financial performance, I am encouraged about our business at the start of the second half of the year and expect our actions to result in increased sales productivity."
The company has implemented a number of strategic initiatives to try and improve its bottom line, including launching new collections, a loyalty programme - Treasured, the merging of its planning and allocation teams, and the consolidation of its store and online fulfilment operations to create one multi-channel distribution centre.
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