Casual clothing producer Tarrant Apparel Group has reported a first-quarter net loss of $1.7 million after a profit of $446,000 last year but said it was seeing improved business trends.

The Los Angeles-based company, which designs and manufactures moderately-priced clothing for men, women and children, said net sales for the quarter plunged to $65.2m from $84.3m last year.

Tarrant chairman, Gerard Guez, commented: "As anticipated, our first quarter, which is traditionally our weakest quarter, continued to be impacted by the challenging US macro-economic environment as well as retailers aggressive inventory management.

"Importantly, we are seeing improving business trends, as retailers begin to build their currently lean inventory levels. In an effort to ensure effective inventory management for our retailers, we continue to deliver high quality, fashionable merchandise in an efficient and timely manner."