Casual shoe manufacturer Phoenix Footwear Group Inc on Tuesday reported a sharp fall in third quarter net income to $551,000 from $817,000 in the year-ago period as it was hit by a $205,000 charge for impairment of property.

The Maine-based company, whose brands include Trotters and Softwalk, said net sales slipped to $9.5m from $12.9m in 2001 although that year-ago figure included $3.2m in sales generated by previously divested brands.

Chairman and CEO James Riedman noted: "Our revenues were impacted by the economic slowdown and continued weakness in the retail sector. Several of our key retailers reduced their basic inventory levels during the third quarter, adversely impacting our re-order business.

"Looking to 2003, our strong brands coupled with the progress we have made in reducing our debt and controlling costs, place us in a strong position to drive earnings results.

"We also expect sales growth to return in the current quarter and continue into 2003. Our current expectation for full-year 2003 is earnings per share in the range of $1.40 - $1.50."