US: Heelys Q3 loss widens as markdowns weigh on margins
- Q3 loss widened to $2.4m from $1.5m last year
- Sales edged up to $6.7m from $6.6m
- Gross margin down to 32.3% against 36.8% last year
Wheeled footwear maker Heelys, which is to be sold to private equity firm Evergreen Group in a US$13.9m cash deal, has seen its third-quarter losses widen.
Losses came to US$2.4m during the three months ended 30 September, compared to $1.5m last year, as markdowns and changes to the product mix weighed on profit margins.
Net sales edged up slightly to $6.7m, compared to $6.6m the same period last year. Domestic sales rose 17.3%, helped by the launch of its Sidewalk Sports wheeled footwear. But international sales fell 8.5%, with declines in France, Germany and Italy.
Gross margin slipped to 32.3% against 36.8% last year, mainly due to inventory markdowns related to the Nano inline footboard and non-current Heelys-wheeled footwear in the US and Europe.
It was also hurt by changes in the product and customer mix, with more global sales coming from lower-priced shoes sold at smaller margins. Larger discounts to European customers and slower moving inventories in Japan and Germany also contributed to the gross margin decline.
Heelys restructuring efforts generated costs of $445,000 in severances, $96,000 in contract terminations and $209,000 related to the closure of the company's office in Belgium in June.
Once the sale to Evergreen Group is completed, it plans to liquidate its assets and operate the shoemaker as a private company.
Sequential Brands, owner of the William Rast and People's Liberation brands, has seen its first-quarter losses widen after acquisition costs offset higher revenue. ...
- Speed to market key to Adidas 2020 growth plan
- GAFTI gears up for change in apparel auditing
- SuperGroup to adapt sourcing model for speed
- Fast Retailing ramps up sustainability efforts
- Apparel software trends 2015: What else to watch?
- Transparency call for German apparel firms
- Strike at Adidas and Nike shoe factory in Vietnam
- Myanmar garments to benefit from export strategy
- H&M and Kering trial recycling technology
- Lululemon Athletica on “strong growth” track
- Global market review of workwear - forecasts to 2019
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead
- Outdoor performance apparel: peaks, valleys, and green fields
- Apparel Retail: Top 5 Emerging Markets Industry Guide