• Losses widen to $3.27m
  • Net revenues down 15.5%
  • Product innovation to drive sales and margins

Footwear and accessories maker Kenneth Cole Productions Inc has widened its second quarter loss on lower sales, but beat expectations thanks to better gross margins, inventory management and cost controls.

For the three months to 30 June, net loss was $3.27m or $0.18 per share, compared with a loss of $2.05m or $0.11 per share a year ago. The firm had earlier forecast quarterly losses of $0.25 to $0.30.

Net revenues were down 15.5% to $93.9m from $111.2m, as retailers lowered their stocks and the company exited its Tribeca and Bongo wholesale businesses.

Comparable store sales declined 14.7%.

Kenneth Cole, chairman and chief creative officer, said that while the results "are still not at acceptable levels," the firm's "increased focus on product innovation and a strong price-value relationship should drive sales growth and improve margins."

Helping to drive demand, he said new line-ups for autumn include the relaunch of Kenneth Cole Ladies Footwear with "new, patented 9-2-5 comfort technology."

Gross margin rose 100 basis points to 42.4% in the quarter, compared to 41.4% in the year-ago period, while selling, general and administrative expenses were down $4.1m to $45.0m.

Jill Granoff, chief executive officer, added: "While the environment remains challenging, our gross margin is improving and we will work to keep our inventories balanced and increase productivity."