Operating income rose by 7% and included $8.2 million in expenses related to cost reduction actions. The decline in operating margins in the quarter was due to cost reduction actions as well as a similar amount resulting from transaction-related currency fluctuations.
Jeanswear: Revenues of our Jeanswear coalition, which includes our Wrangler, Lee and Riders brands, were down 8% (6% in constant dollars) during the quarter, with declines in both our domestic and international businesses. Lee brand revenues in the U.S. rose 3% in the quarter, as the brand continues to benefit from the success of new products for both men and women in mid-tier department stores. Our U.S. mass business declined 9% in the quarter because of reduced consumer demand for apparel and retailers' inventory adjustments.
The decline in Jeanswear operating income in the quarter included $22.6 million in expenses to reduce costs. Jeanswear profitability was also negatively impacted by higher promotional activity, costs related to managing inventory levels and additional provisions for bad debt expense related to recent retail bankruptcies.
Sportswear: Total revenues of our Sportswear coalition, which includes our Nautica and John Varvatos brands as well as the Kipling brand in North America, decreased 9% in the quarter. Nautica revenues declined 12% in the quarter, reflecting difficult conditions in department stores and weaker than expected performance in its retail outlet stores. Our Kipling and John Varvatos brands each continued to grow strongly, posting double-digit revenue growth in the quarter.
Cost reduction expenses of $3.2 million contributed to a drop in fourth quarter operating income. Increased markdown activity and negative comparable store sales in Nautica retail outlets significantly impacted the profitability of the Nautica brand.
Contemporary Brands: Revenues of our Contemporary Brands coalition, which consists of the 7 For All Mankindand lucy brands, decreased 5% in the quarter. Revenues of the 7 For All Mankind brand declined reflecting a slowdown in store traffic within upper tier specialty and department stores. Seven For All Mankind opened thirteen retail stores in 2008 and we are encouraged by their performance to date. Revenues of our lucy brand rose 4% in the quarter, benefiting from new store openings.
The decline in operating income in the current quarter reflects high levels of promotional and markdown-related expenses as a result of the weakening upper tier channel as well as efforts to reduce inventory levels.
20240830145952.gif)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
