Direct apparel market Blair Corp suffered a larger loss on a steep sales decline during the first quarter.

During the three months ended 31 March, the company's net loss grew to US$5.1m, or $1.35 a diluted share, from a loss of $4.8m, or $1.23, in the first quarter of 2006.

Meanwhile, sales contracted 25.9% to $76.1m from $102.7m in the year-ago quarter.

Blair said that the sales tally was 14.8% below company expectations and that the decline "was a result of lower customer demand and slow response to spring apparel." The company also cited difficulties associated with a new fulfilments software system for the shortfall.

Unit sales were off 27.6%, partially offset by a 1.7% increase in average ticket.

Lower catalogue circulation levels and a decline in e-commerce revenues also cut into the top line of the Warren, Pennsylvania-based firm.

Although the company consolidated its facilities for merchandise returns, a move completed last month, severance expense declined to $249,000 during the first quarter from $1.5m during the first quarter of last year.

Blair in January agreed to be acquired by Golden Gate Capital's Appleseed's Topco subsidiary for $176m and is awaiting shareholder approval of the buyout. The company said that expenses related to the contemplated merger totalled $975,000 during the first quarter.
 
By Arnold J Karr.