US: Perry Ellis cuts FY guidance and bonuses
Apparel maker Perry Ellis International Inc has slashed its full year earnings forecast after seeing lower sales over the holiday season, and says it is cutting all management bonuses for the fiscal 2009 in an attempt to save costs.
The company, which is in the midst of a review of underperforming brands and businesses, is also lining up job cuts and reductions in corporate overheads in an attempt to save an extra $5m a year.
These savings are on top of the $15m it hopes to save from the strategic review.
"We have identified over $20m in savings for fiscal 2010 by reducing our US workforce, by cancelling bonuses for management and by rationalizing our office space," said Oscar Feldenkreis, president and COO.
"We are also exiting businesses that have not been profitable for us such as with certain specialty stores, while focusing our immediate attention on maximising profitability in businesses with strong future potential such as outlet stores and ladies which have underperformed this year."
The review is due to be completed by the beginning of February.
Perry Ellis, whose brands include its namesake line as well as Jantzen, Laundry by Shelli Segal, and C&C California, said higher holiday markdowns coupled with retailers delaying spring deliveries mean fourth quarter revenues are likely to fall to $200m to $210m.
This is down from $212.3m for the same period last year.
It also believes quarterly earnings per share are set to be break-even, compared with $0.65 per share last time.
"The entire apparel industry was faced with a highly promotional environment to drive customer purchases in December, and we were not immune to this phenomenon," Feldenkreis said.
Perry Ellis sees its fiscal 2009 earnings in the range of $0.55 to $0.65 per share, almost half earlier forecasts of $0.90 to $1.10 per share.
Revenue forecasts for the 12 months to 31 January 2009 have also been cut from $875 - $900 m to $860 - $870m.
"We feel confident that the actions we have taken during fourth quarter will significantly enhance our profitability next year," Feldenkreis added.
Claire Stansfield, one of the founders and original owners of C&C California, has agreed to re-join the management team of the iconic T-shirt brand she co-founded in 2002....
Apparel retail group Perry Ellis International recorded a 36% fall in first quarter profits to US$5.8m, but beat expectations despite a 9.7% revenue decline....
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