Phoenix aims to cut debt as Q4 losses grow

US: Phoenix aims to cut debt as Q4 losses grow

By just-style.com | 21 April 2009

Phoenix Footwear Group is aiming to eradicate its debt by exiting loss-making businesses as fourth quarter losses continued to grow.

The company is planning to sell off its Chambers private label accessories business after previously announcing that it would terminate its Tommy Bahama footwear licence.

The two deals should yield adequate proceeds to extinguish the company's total bank debt during fiscal 2009, Phoenix said.

The announcement came as the company said fourth quarter sales had fallen 15% to US$16.5m, bringing full-year sales down 9% to $75.1m.

Accessories revenues were down 9.9% to $37.4m, while footwear sales declined 8.7% to $37.7m.

Phoenix's fourth quarter loss was $14.2m, including charges, compared to $12.8m a year ago.

Full-year losses were $18.8m, compared to $16.6m.

"With the economic headwinds, this past year was an especially challenging one," said Russell Hall, company president and CEO. "We are disappointed in our net sales decline and resulting net loss; however, we have made some important gains in managing our inventory and gross margins, and in restructuring and right-sizing our business."

Recent months have seen the departure of Phoenix's CEO and CFO, plus the loss of 17 jobs as the company restructures its operations.

Sectors: Finance, Footwear

Companies: Phoenix Footwear, Tommy Bahama