Stage II Apparel Corp yesterday announced a net loss of $604,000 or $.15 per share for the quarter ended March 31, 2001. The net loss reflects a contraction of the company's apparel distribution business as part of its strategy to focus on licensing opportunities. As a result, net sales for the first quarter of 2001 declined to $664,000, compared to net sales of $2.9m in the same quarter last year.

Richard Siskind, president and CEO of Stage II, said: "We are redirecting our business to emphasise trademark licensing in an effort to reduce the costs and inventory risks associated with our historical core business. While continuing to distribute our apparel lines on at least a transitional basis, we are now focusing on opportunities to license a wide variety of retail items under our Cross Colours and Timber Run brands in both domestic and international markets.

"Earlier this year, we completed our first international licensing transaction with a Japanese apparel company for sales of men's and ladies' apparel under the Cross Colours brand throughout Japan and its territories and possessions. Given the timing requirements for introduction of licensed products, we do not expect our licensing program to reverse our recent losses from operations in the near term. However, we do see substantial promise for our business redirection in the longer term," he concluded.