(Filed Under Financial and General Interest News). Hurt by a 67.7 percent decrease in wholesale sales, which accounted for approximately 86 percent of the total decrease, Frederick’s of Hollywood Group Inc. cited a 21.3 percent net sales drop during the second quarter ended January 23, 2010; to $41,321,000 from $52,516,000.
Total store sales dropped 6.5 percent, while comparable store sales were down 5.3 percent. Direct sales, which are made up of catalog and website operations, were relatively flat.
During the six months ended January 23, 2010, net sales decreased 17.4 percent, to $78,529,000 from $95,081,000. Wholesale sales were down 54.8 percent, which accounted for approximately 78 percent of the total sales decrease.
Despite these dismal numbers, Thomas Lynch, chairman and chief executive officer of the company, reported that he expects results to improve. “The turnaround strategy we first introduced approximately one year ago has strengthened the company’s foundation and positioned us for improved results,” he said.
“While we continue to face certain macroeconomic pressures, the benefits from our cost cutting program have started to help offset these effects and will increasingly play a part in our turnaround. Overall, the cost control methods we have put in place have reduced expenses significantly […] The focus for the future will be on several fronts including driving increased traffic to our e-commerce website, increasing our wholesale sales by developing Frederick’s of Hollywood brand extension opportunities with select wholesale customers, and announcing the first licensing agreement for our recently announced licensing initiative for the Frederick’s of Hollywood brand.”
For further information, contact Thomas Rende, chief financial officer of Frederick’s of Hollywood Group Inc, by calling (212) 789-4700.
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