Tarrant Apparel Group has said that its net sales increased 15.5% to $57.4m in the fourth quarter of 2006, due to higher sales in the company's private brands and private label businesses, but posted full-year losses.

Tarrant's net income for the fourth quarter of 2006 was $1.7m, or $0.06 per diluted share, compared to a net loss of $1.5m, or $0.05 per share, in the same quarter of the prior year. Income from operations was $3.3m compared to loss from operations of $1.1m in 2005.

Private Brands sales at the apparel manufacturer increased to $12.0m compared to $9.6m in the fourth quarter of 2005, primarily due to increased sales of the company's American Rag brand. Meanwhile, Private Label sales also increased in the quarter, to $45.4m from $40.1m in the same period last year.

Net sales for the group's fiscal 2006 increased 8.3% to $232.4m, which exceeded the higher end of the company's guidance of $230m. Again, the increase in net sales was primarily due to addition of new customers to the private label business. Private brands sales, however, were down to $51.2m in 2006, compared to $55.0m in 2005.

Net loss for fiscal 2006 was $22.2m, or $0.73 per diluted share, including a non-cash reserve of $27.1m relating to the recoverability of certain notes receivable, the company said.
"I am very pleased with our accomplishments during 2006. We grew the business and have gained momentum as evidenced by our fourth quarter results," said Gerard Guez, chairman and interim CEO of Tarrant Apparel Group. "Despite losing three key brands, which accounted for approximately $23.0m of the net change between our 2005 and 2006 revenues, we were able to grow sales by 8.3% for the year, and 15.5% in the fourth quarter. I was particularly pleased to see improved margins and continued tight controls."

Tarrant announced in December that it had agreed an offer to acquire certain assets and entities comprising The Buffalo Group for a purchase price of up to US$120m. The completion of the acquisition is subject to a number of conditions, including approval of the company's shareholders.