Athletic shoe and clothing retailer The Finish Line Inc has swung to a second quarter loss, as it continues to be weighed down by costs associated with the closure of its Paiva women's wear chain.

For the 13 weeks to 1 September, the company reported a net loss of $1.8m, or $(0.04) per diluted share versus net income of $9.9m, or $0.21 per diluted share for the same period last year.

The loss includes a pre-tax charge of $13.0m ($0.17 per diluted share) for costs related to the closure of the 15 Paiva stores.

Net sales increased 1.3% to $343.0m in the quarter, from $338.6m last time. Comparable store sales fell 4.7%.

Alan H Cohen, chairman and chief executive officer, said the company has made progress on "reorganising our footwear buying and planning teams, evolving our product assortment to emphasise premium products in both performance and sport style categories, remerchandising our stores, and increasing our investment in our direct-to-consumer business.

"We believe these initiatives will lead to improved financial performance in the coming quarters.

Finish Line store merchandise inventories are also 8% lower than a year ago, which "makes room for a strong flow of new products going into the important holiday season."

For the tear-to-date, net loss is $5.7m versus a profit of $14.3m in the same period last year. Net sales rose 0.6% to $631.3m and same-store sales decreased 4.4%.

The Finish Line, which operates 698 Finish Line and 95 Man Alive stores, is currently embroiled in a dispute with Genesco over its proposed $1.5bn acquisition of the clothing and hat retailer.

Genesco has filed a lawsuit ordering Finish Line to close the merger agreement. But Finish Line and its bankers say they have doubts about the deal after Genesco swung to an unexpected second quarter loss of $4.2m and sales fell short of forecasts.