USA: Warnaco To Axe US Plants, Reports H1 Results
The New York-based company, which makes items ranging from intimate apparel, menswear and jeanswear to swimwear and sportswear, said for the five months ended July 5, net revenues were $662.2 million and net earnings $14.2m, or 31 cents per share.
Warnaco, which exited Chapter 11 bankruptcy protection in early February, said in a press release that for the second quarter, net revenues were $335.8m and it suffered a net loss of $8.5m, or 19 cents.
It added for the six months ended July 5, on a pro forma basis as if the company had emerged from bankruptcy at the beginning of fiscal 2002, net revenues were $778.1m, and net income was $32.1m, or 71 cents.
Those figures compared to prior year's net revenues of $791.8m, net income of $25.5m and earnings per share of 57 cents.
The company also said it will close its remaining US plants but did not give any further details as to their location, the amount of workers who will lose their jobs or a timetable for the closures.
President and CEO, Joseph Gromek, said "Our impressive portfolio of brands is resonating well with consumers. This, combined with the progress we made toward realising the strategic financial and operational objectives we set at the beginning of the year, enabled us to record improved first half 2003 results in a challenging retail environment.
"We also enhanced the foundation for future growth including an amendment to our Calvin Klein licensing agreement with Phillips-Van Heusen, which solidified our ongoing relationship and expanded our product offering to include Calvin Klein swimwear."
CFO James Fogarty added: "As indicated in our first quarter release, we expected our second quarter to be significantly below prior year results, in part reflecting the earlier shipment of certain programs in the first quarter of 2003.
"However, on a pro forma basis, our first half net income increased by 26 per cent and our operating margin rose by nearly 90 basis points to 8.4 per cent. We benefited from initiatives aimed at increasing our operating margin; including reductions in our product costs and improvements in our inventory flow at retail.
"To further our objective of improving our operating flexibility and margins we are closing our remaining domestic manufacturing facilities."
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