Home / Knowledge / News / Apparel/Garments / Improved product quality helps boost sales - Dov Charney
Improved product quality helps boost sales - Dov Charney
15
Mar '12
American Apparel Inc, a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel, announced its financial results for the fourth quarter and year ended December 31, 2011. The Company also provided guidance with respect to its expected 2012 performance.

Summary of Fourth Quarter 2011 Financial Performance (4Q 2011 vs. 4Q 2010)
Comparing the 2011 fourth quarter to the corresponding period last year, the Company reported that:

• Net sales increased 9% to $157.6 million on a 7% increase in comparable store sales, a 19% increase in online sales, a 6% increase in wholesale net sales and a 9% decrease in the average number of stores. In addition, total net sales increased as a result of extensive warehouse-type clearance sales conducted in the 2011 fourth quarter.
• Gross margin decreased to 53.2% from 55.6% due primarily to higher raw material and manufacturing overhead costs, the effect of lower margins on warehouse clearance sales and promotional activities. Partially offsetting these reductions were the impacts of reduced shrink and lower manufacturing direct labor expense.
• Operating expenses decreased $5.8 million driven by lower occupancy expenses as the result of fewer stores and lower professional fees.
• Cash generated from operating activities improved by $17.1 million to $12.2 million.
• Adjusted EBITDA improved by $9.6 million to $9.1 million from a previous year loss of $0.5 million.
• Net loss per share was $0.11 in 2011 vs. $0.27 in 2010.
• During the quarter the Company opened five retail stores and closed three to end the year with 249 stores worldwide.
• The existing senior credit facility due to mature in July 2012 was replaced with a new three year senior credit facility. In addition, the second lien loan due on December 31, 2013 was extended to December 31, 2015. Accordingly, after considering the refinancing and recent operating performance improvements, the Company has concluded that there no longer is substantial doubt about its ability to operate as a going concern.

Summary of 2011 Financial Performance (2011 vs. 2010)
• Net sales increased 3% to $547.3 million on flat comparable store sales, a 17% increase in online sales, a 2% increase in wholesale net sales and a 9% decrease in the average number of stores.
• Gross margin increased to 53.9% from 52.5% in 2010 due to significantly improved manufacturing efficiency. The manufacturing cost improvement was partially offset by an increase in yarn and fabric costs and unit cost increases associated with factory overhead due to lower production levels.
• Operating expenses decreased $11.8 million driven by lower occupancy expenses as the result of fewer stores and lower professional fees.
• Cash generated from operating activities was $2.3 million, an improvement of $34.7 million.
• Capital expenditures decreased $4.6 million to $11.1 million.

Must ReadView All

Textiles | On 29th Apr 2017

Textile sector may have uniform GST rate: Irani

The textile sector could have a uniform Goods and Services Tax (GST)...

Textiles | On 29th Apr 2017

EU rules needed to curb textile worker exploitation: MEPs

European Union (EU) rules are needed to oblige textile and clothing...

Apparel/Garments | On 29th Apr 2017

US retail operating growth to be 1.5-2.5% in 2017: Moody's

The forecast for operating income growth in the US over the next 12...

Interviews View All

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Smith Vaghasia
Sanado India

Online remains the best destination for shopping

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X