Apparel company Blue Holdings posted a net loss of approximately $5.6m, versus a loss of $5.4m in 2006, in a preliminary statement that forecast a more streamlined and profitable business next year.

There were signs in the final quarter of a recovery, with quarterly net loss for the period expected to be $1.9m, narrowed from $8.9m in Q4 2006.

The company expects to report net sales for the fourth quarter of approximately $7.3m, compared to $7.4m in the prior year period. It expects net sales of approximately $33.6m, compared to $49.0m for the full-year.

"While 2007 was a challenging year, we are well underway with a series of corrective actions that should improve Blue Holdings' operating performance. We are forecasting that 2008 will be the year that the company returns to profitability," said Glenn Palmer, president and chief executive officer.

"We will continue to make significant changes to streamline the business around our core brands and position Blue Holdings for sustainable revenue and profit growth. We have assembled a strong new management team that is focused on the fundamentals of cost control and is committed to making sustainable profitability its top priority. In 2007, we stabilised and improved our performance from 2006 by significantly reducing corporate overhead, eliminating non-productive categories, liquidating excess inventory and stopping all non-essential capital expenditures."

The company said it anticipates reporting its actual results on 15 April, having experienced delays arising from the resignation of its CFO Larry Jacobs. Jacobs will remain until its Annual Report on Form 10-K is completed, and will sign and certify the filing, it said.

"I want to thank Larry for his hard work," said Palmer, "a search for his successor is underway."

Blue Holdings increased its first quarter of 2008 revenue guidance to the range of $8.0-$8.5m and expects the quarter to be marginally profitable.

Palmer added: "We believe that the challenges from 2007 are predominantly behind us and that we have laid a strong foundation from which we will be able to achieve top-line growth and a return to profitability. Additionally, we plan to aggressively, yet prudently, increase sales through a tighter focus on product assortment, implementing additional replenishment programs and increasing international distribution, while continuing to make meaningful operational and strategic changes to our business to ensure that 2008 will be a stronger year for us."