Lingerie specialist Frederick's of Hollywood has pledged to cut costs further after reporting a US$5.3m loss in its first quarter ended 25 October.

The company's net sales were up 14.5% to $42.6m, thanks to the addition of $9.4m in net sales from the wholesale division following its merger with parent company FOH Holdings in January 2008.

However, retail sales slipped $4.1m to $33.1m in the quarter.

The company's $5.3m net loss compared with a loss of $3.9m in the same period last year.

"As we anticipated, our first quarter results were significantly impacted by an unprecedented negative macroeconomic environment," said executive chairman Peter Cole.

He added that the company was continuing to cut operating expenses, mainly by reducing personnel.

Excluding store staff, Frederick's has axed about 15% of its domestic workforce since the merger, also transferring some manufacturing support functions to its facility in the Philippines.

That has contributed annualised net savings of about $3.8m, Cole said.

But he said the company was continuing efforts to consolidate its retail and wholesale merchandising and design, distribution, IT and finance functions.

"We are also focused on improving online sales and anticipate that our new, state-of-the-art e-commerce system will be operational in early calendar year 2009," said Cole.