Apparel maker Hampshire Group has seen its first-quarter losses widen on the back of lower sales at its Rio Garment Honduran manufacturing plant and restructuring charges.
The company, whose subsidiaries include Hampshire Brands, Rio Garment and Scott James, said net loss widened to $5.4 million for the three months to March 30, compared to $5 million in the same period last year.
Sales declined 11.8% to $19.9 million from $22.6 million last year, with a decline at Rio Garment partially offset by gains in new Dockers tops.
Gross margin, however, improved to 18.2% from 16.9% last year, with the production of more fashion-oriented products with higher average selling prices at Rio Garment, as well as manufacturing efficiencies at the Honduran facility.
“The first quarter results are unacceptable to me and to the board, and I am confident this company can and will perform better. We are embarking upon a new period for Hampshire, one noteworthy for change and focused on profitability, prudent allocation of resources and growth,” said CEO Paul Buxbaum.
He added that Hampshire is making improvements to refocus its business, including two senior management changes – a new CEO and head of sourcing and operations, as well as the appointment of two new directors.
“We are certain to implement more management and personnel changes as we attack costs, implement a new sourcing and merchandising strategy, eliminate unprofitable business and refocus the firm’s culture.”
In addition, Maura McNerney Langley has resigned as CFO to pursue another opportunity. The company said it has initiated an external search for a replacement.
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