A renewed focus on the design and quality of its collections boosted sales and margins and helped J Crew Group Inc swing to a second quarter profit.

For the three months to 4 August, net income was $20.6m, or $0.32 per diluted share, compared with a net loss of $2.8m, or loss of $0.08 per diluted share, in the same period last year.

Revenues at the New York-based multi-channel specialty apparel retailer increased 13% to $304.7m.

Retail and factory store sales rose by 11% to $219.6m, with comparable store sales increasing 4%. Direct sales (Internet and catalogue) rose by 19% to $74.5m, compared with an increase of 7% in the second quarter of fiscal 2006.

Gross margin increased 160 basis points to 43.7% of revenues from 42.1% of revenues in the second quarter of fiscal 2006.

Operating income was up 38% to $37.1m, or 12.2% of revenues, compared to $26.8m, or 10.0% of revenues last time.

Millard Drexler, J Crew's chairman and CEO said: "We are pleased with our second quarter and first six months results. Our team continues to be focused on the level of design, quality, style and detail that our customers have come to expect from us."
For the six month period, profit soared to $45.3m, or $0.71 per diluted share, from $1.7m, or $0.05 per diluted share, in last year's first half. Revenues increased 18% to $602.0m.

Store sales in the first half rose 15% to $420.6m, with comparable store sales increasing 8%. Direct sales rose by 25% to $161.1m.

J Crew raised its outlook for the year to $1.42 to $1.46 per diluted share, from $1.37 to $1.41.

The company operates 189 retail stores, the J Crew catalogue business, jcrew.com, and 55 factory outlet stores selling women's and men's apparel, shoes and accessories.