Fashion apparel maker Hampshire Group widened its net loss in the fourth quarter as one-off costs and a difficult sales environment hit the group's bottom line.

In the three months to the end of December, losses amounted to US$8.9m, compared to a net loss of $0.6m a year earlier. The loss included a non-cash writedown of $8.4m.

Sales dropped 12.9% to $35m from sales of $40.2m in the year ago period. The decline was primarily due to the expiration of several licensing agreements at the end of 2012. Increased sales in the group's remaining men's brands division partially offset a decline in its Rio garment division.

Gross profit margin from ongoing operations, however, showed year-over-year improvement in line with group expectations.

"While the fourth quarter and full year 2013 results were disappointing, several one-time expenses during the quarter and year, as well as losses from discontinued operations, mask underlying progress in gross profit margins and expense reduction," said CEO Paul Buxbaum.

Nonetheless, he added: "We expect a continued difficult 2014 sales environment; however, we expect to see operating improvement in 2014. We expect an increase in gross profit margin in men's brands stemming from new sourcing arrangements. We expect to recapture lost gross profit margin at Rio, and should see sustained gross profit margin growth throughout 2015."