New York designer Kenneth Cole Productions has swung to a second-quarter net loss on the back of lower sales and one-off costs.

For the quarter ended 30 June, the company recorded a net loss of US$3.7m, compared to a $579,000 net profit in the same period last year. The group posted a operating loss of $4.2m, compared to a $1.1m operating profit last year.

Net sales declined 4.5% to $87.5m. Wholesale revenues edged down 3.3% to $50.3m as a result of lower demand for private label footwear and Reaction handbags. Consumer direct revenues fell 6.1% to $37.2m due to the operation of two fewer stores and a comparable store sales decline of 2.7%. 

During the quarter, the company incurred charges charges linked to a new distribution centre following the insolvency of one of its third-party logistics operators, as well as professional service costs related to a deal led by founder Kenneth Cole to take the company private.

For the half-year, Kenneth Cole’s net loss narrowed to $5.6m, compared to $16.6m the same period last year. Operating loss also narrowed to $8m, compared to a $16.1m loss last year. Net sales edged down 2.1% to $195.2m.

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