Retail sales volume of J. Lindeberg apparel line up at PPLB
People's Liberation Inc, the designer, marketer and seller of high-end casual apparel under the brand names William Rast, People's Liberation and in the United States, J. Lindeberg, announced financial results for the first quarter ended March 31, 2009.
• Net sales increased to $7.5 million for the quarter ended March 31, 2009, an 8.9% increase over net sales of $6.9 million for the 2008 first quarter.
• Sales growth was primarily related to retail and wholesale sales of J. Lindeberg branded apparel line.
“While we have not been immune from the effects of global recession, we have a number of brand building initiatives underway to capitalize on the popularity of our William Rast and J. Lindeberg fashions,” stated Mr. Dyne. “We are looking at expanding our retail footprint and creating a new European division to directly sell William Rast and People's Liberation branded apparel in Europe. We also continue to see strong potential for William Rast licensing agreements to expand the product mix of that brand into footwear, eyewear, handbags and more. At the same time, we are making efforts to improve margins by moving denim production offshore.”
Mr. Dyne continued, “As planned, during Q1-2009, we prepared for the transition of our People's Liberation branded products to be distributed in North America exclusively by Charlotte Russe. As a result of the transition, current retailers elected to cancel orders to work through existing inventory. We were well prepared for this transition and expect to begin shipping to Charlotte Russe in time for their back to school sales. Additionally, we sold through the majority of our existing People's Liberation inventory at reduced margins.”
Net sales for the first quarter of 2009 totaled $7.5 million compared with $6.9 million in the corresponding prior-year quarter. The increase in net sales was due primarily to an increase in wholesale and retail sales volume of our J. Lindeberg apparel line, offset by a decrease in sales volume of our People's Liberation product line.
Gross margin fell to 44.5% for the first quarter of 2009 compared with 49.6% in the first quarter of 2008, driven in part by off-price sales, including off-price sales of our People's Liberation product line, as we prepared to cease selling People's Liberation branded merchandise effective April 30, 2009 to customers other than Charlotte Russe.
Total operating expenses for the first quarter of 2009 amounted to $4.7 million, compared with approximately $3.1 million in the first quarter of 2008. This reflected brand-building investments, including our William Rast fashion show that took place in the first quarter of 2009, increased design fees related to our design agreement with Paris68, and increased sample costs and administrative salaries.
Operating expenses were also higher in the first quarter of 2009 because of expenses relating to our J. Lindeberg retail and wholesale operations acquired in July 2008, professional fees, and impairment charges related to one of our trademarks that we are no longer using.