Women's intimate apparel and sleepwear retailer Movie Star Inc has reported a fall in second quarter net sales to $14.16 million, down from $16.68m in the same period of fiscal 2003.

The company also saw pre-tax income fall to $417,000 for the period, down from $751,000 in the previous second quarter, while gross margin declined to 30.2 per cent compared to 31.5 per cent in the prior year.

"Business at retail was extremely soft for ladies' intimate apparel in general for this past holiday season, which resulted in lower sales for the company," CEO Mel Knigin explained.

"Also, due to this poor retail environment, the company incurred a higher percentage of markdowns than in the previous year's quarter, resulting in lower gross margins for the current year's quarter.

"Additionally, because of the poor holiday season at retail, the retailers are refocusing their spring and summer purchasing plans and to date the orders we have received for the January through June period are significantly lower than we had at the same time last year."