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Decrease in wholesale sales of William Rast brand
17 Aug '10
6 min read
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 second quarter ended June 30, 2010.
Three Months Ended June 30, 2010
Net revenue for the second quarter of 2010 decreased 31.2% to $6.8 million compared with net revenue of $9.9 million for the second quarter of 2009.
The decrease in net revenue was due primarily to decreased People's Liberation sales from its exclusive license and distributor relationship with Charlotte Russe and a decrease in wholesale sales of its William Rast brand in the United States as a result of current macro economic conditions resulting in retail store closures and major retailers carrying reduced amounts of inventory.
The decrease in net sales for the three months ended June 30, 2010 was offset primarily by increased retail sales from the Company's William Rast and J. Lindeberg retail stores which resulted from more retail stores being open in the second quarter of 2010 as compared to the second quarter of 2009.
“We are focused on building awareness and visibility by increasing the number of our branded stores for both William Rast and J. Lindeberg,” stated Colin Dyne, the Company's Chairman and Chief Executive Officer.
“Both our J. Lindeberg and William Rast retail stores have seen increased momentum and awareness. This August, we opened our latest William Rast retail store in Miami, Florida, which is part of our expansion plan to roll-out additional retail stores in major metropolitan locations over the next several years, and now gives us a total of four William Rast retail stores and three J. Lindeberg retail stores in the U.S.”
Gross profit for the second quarter of 2010 was $3.6 million compared with $4.7 million for the second quarter of 2009. Gross margin improved to 53.1% in the second quarter of 2010 from 47.6% in the second quarter of 2009. The improvement was driven by design revenue received from a design and license agreement the Company entered into in May 2010 with a major retailer and increased retail sales of the Company's J. Lindeberg and William Rast product lines at higher gross margins.
Selling, design and production expenses for the second quarter were $1.7 million, compared to $2.3 million in the prior year period. As a percentage of net revenue, selling, design and production expenses slightly increased to 24.4% compared to 22.6% in the prior year.
General and administrative expenses for the second quarter of 2010 were $2.4 million, compared to $1.6 million in the prior year period. As a percentage of net revenue, general and administrative expenses increased to 35.6% from 16.3% in the prior year. Total operating expenses for the second quarter of 2010 were $4.1 million, compared to $3.9 million a year ago.
The increase in operatingexpenses was due primarily to the expansion of our retail store operations. In the second quarter of 2009, we operated two retail stores, compared to six retail stores in the second quarter of 2010. The increase in operating expenses was offset by a decrease in selling, design and promotion expense during the three months ended June 30, 2010.
Three Months Ended June 30, 2010
Net revenue for the second quarter of 2010 decreased 31.2% to $6.8 million compared with net revenue of $9.9 million for the second quarter of 2009.
The decrease in net revenue was due primarily to decreased People's Liberation sales from its exclusive license and distributor relationship with Charlotte Russe and a decrease in wholesale sales of its William Rast brand in the United States as a result of current macro economic conditions resulting in retail store closures and major retailers carrying reduced amounts of inventory.
The decrease in net sales for the three months ended June 30, 2010 was offset primarily by increased retail sales from the Company's William Rast and J. Lindeberg retail stores which resulted from more retail stores being open in the second quarter of 2010 as compared to the second quarter of 2009.
“We are focused on building awareness and visibility by increasing the number of our branded stores for both William Rast and J. Lindeberg,” stated Colin Dyne, the Company's Chairman and Chief Executive Officer.
“Both our J. Lindeberg and William Rast retail stores have seen increased momentum and awareness. This August, we opened our latest William Rast retail store in Miami, Florida, which is part of our expansion plan to roll-out additional retail stores in major metropolitan locations over the next several years, and now gives us a total of four William Rast retail stores and three J. Lindeberg retail stores in the U.S.”
Gross profit for the second quarter of 2010 was $3.6 million compared with $4.7 million for the second quarter of 2009. Gross margin improved to 53.1% in the second quarter of 2010 from 47.6% in the second quarter of 2009. The improvement was driven by design revenue received from a design and license agreement the Company entered into in May 2010 with a major retailer and increased retail sales of the Company's J. Lindeberg and William Rast product lines at higher gross margins.
Selling, design and production expenses for the second quarter were $1.7 million, compared to $2.3 million in the prior year period. As a percentage of net revenue, selling, design and production expenses slightly increased to 24.4% compared to 22.6% in the prior year.
General and administrative expenses for the second quarter of 2010 were $2.4 million, compared to $1.6 million in the prior year period. As a percentage of net revenue, general and administrative expenses increased to 35.6% from 16.3% in the prior year. Total operating expenses for the second quarter of 2010 were $4.1 million, compared to $3.9 million a year ago.
The increase in operatingexpenses was due primarily to the expansion of our retail store operations. In the second quarter of 2009, we operated two retail stores, compared to six retail stores in the second quarter of 2010. The increase in operating expenses was offset by a decrease in selling, design and promotion expense during the three months ended June 30, 2010.
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