Loehmann's Holdings Inc, the cut-price retailer of well known designer and brand name women's and men's fashion apparel and footwear, blamed the weak economic environment and challenging retail conditions for a drop in earnings during the first nine months of the year.

Net income was $3.9 million, or $1.15 per diluted share. Net income in the prior year period, excluding non-recurring reorganisation items, was $7.0 million.

However, earnings before interest, taxes, depreciation and amortization (EBITDA) increase 6.5 per cent to $16.8 million for the first nine months of fiscal 2001. This compares with $15.8 million in the prior year period.

Net sales for the nine-month period were $238.3 million compared to net sales of $251.5 million in the comparable period of 2000. The net sales for the nine months of 2000 include $6.2 million of revenue generated by eleven stores, which the company closed during the first half of 2000.

Excluding this revenue, net sales last year were $245.3 million. Comparable store sales for the thirty nine-week period decreased 2.9 per cent. Gross margin, as a percent of sales, increased 250 basis points to 37.9 per cent, or $90.3 million, versus 35.4 per cent, or $89.1 million, for the comparable period last year.

For the third quarter, EBITDA was $8.1 million compared with $9.8 million in the prior year period. Net income for the quarter was $2.8 million, or $0.83 per diluted share. Net income in the prior year period, excluding non-recurring items, was $7.0 million.

Net sales for the quarter were $83.6 million compared with net sales of $88.6 million in the same period last year. Comparable store sales for the quarter decreased 5.5 per cent.