• Swings to Q1 loss of $2.9m
  • Sales fell 8.3% to $65.0m
  • Sees "improving" Q2 performance 

Higher fuel costs, a late Easter holiday and adverse weather conditions have been blamed for lower sales and a first quarter loss at Canadian fashion retailer Le Château Inc.

The company, which has 241 stores, reported a net loss of $2.9m for the three months to 30 April , compared to net earnings of $4.5m in the same period last year.

Sales fell 8.3% to $65.0m from $70.9m, with same-store sales falling by 12.0%, as the company resorted to promotions to try to clear merchandise. Gross margin percentage was down to 70.3% from 73.2% last year.

Despite what it describes as "a difficult retail environment," Le Château says sales performance in the first nine weeks of the second quarter is "improving", with total retail sales down 1.3% and same-store sales falling 4.7% compared to the same period a year ago.

"We are encouraged by this improving trend particularly when measured against the strong 2010 second quarter result," it said.