Apparel manufacturer Pacific Brands has posted a profit for the first half of its fiscal year, when it continued to cut its workforce under a restructuring plan.

The company reported interim profits after tax of A$22m (US$19.6m) on sales down 7.8% or A$81m to A$960m for its first half of 2009.

Although operating earnings were in line with expectations, international sales fell $14m.

Conceding it had encountered "difficult market conditions," the Australian company has had to implement a 'Pacific Brands 2010' transformation strategy aimed at securing $50m in savings this year.

Second half actions also saw the company cut the workforce by more than 650, close seven factories with a further three slated for the axe next month, reduce its inventory by $93m and sell three properties for more than $8m.

"As indicated to the market in August last year, our earnings in the first half have been affected primarily by the delayed impact of the sharp decline in currency rates," said Pacific Brands CEO Sue Morphet.

"The impact was caused by historical hedge positions not being fully recovered in price or transformation savings - realised exchange rates will improve in the second half as hedges unwind but are expected to still be below the previous corresponding period. Transformation benefits are expected to have a positive impact on earnings in the second half of the year.

"For the first time in many years we have a cost efficient platform, on which we will continue to build the future of the company. We now have a sound base to take advantage of the new and extended capability sets to grow the business."

As well this year's projected $50m savings, Pacific Brands estimates it is on track to securing annualised savings of $150m by the end of next year, with the full impact felt in 2012.

The seven shut factories are Nunawading, Bellambi, Cessnock and West End as well as Palmerston North and two in Christchurch, New Zealand, while in addition Pacific Brands divested its China footwear operations transferring the business and employees to a new owner.

Rationalisation and divestment will see have seen a reduction of 3,000 jobs at Pacific Brands by next month.

Other pruning has included divesting Icon Clothing and transferring the Merrell footwear business. Further "rationalistion" is expected.

"While brand and business divestments and discontinuations have, as expected, impacted sales, key continuing brands had performed well," said Morphet.

Our key brands such as Bonds group [up 4%], Mossimo [up 22%], Clarks [up 12%] and Volley [up 6%] have grown, affirming our strategy of focusing on our top performing brands."