Denim and chino specialist Novel Denim Holdings Ltd on Monday reported an expected second quarter loss of $3.6 million, or 40 cents per diluted share, citing its failure to improve garment production efficiencies for its woes. The Hong Kong-based company said in the quarter to September 30 net sales fell 5.6 per cent to $37.5m from $39.8m in the year-ago period with garment sales slumping 40.6 per cent to $19.4m from $32.6m in 2001.