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

Pic: Shutterstock

Textiles | On 8th May 2021

French Development Agency to invest $83m in Ivory Coast cotton sector

Over a period of five years, the French Development Agency (AFD) will ...

Pic: Juki

Apparel/Garments | On 8th May 2021

Japanese companies collaborate to develop sewing machine business

Juki Corporation and Pegasus Sewing Machine Mfg have entered into a...

Pic: Rocky Brands

Apparel/Garments | On 8th May 2021

Rocky Brands expands Made in America capabilities

Rocky Brands has expanded the offering of its Made in America product ...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Blockchains will be in heavy use by early adopters by 2025

Textile Industry, Head honchos

Textile Industry
Head honchos

Main challenges are breakdown of supply chain and shrinkage of manpower

Textile Industry, Head honchos

Textile Industry
Head honchos

Opportunity now to reimagine processes & systems in a digital environment

Kriti Kanodia,

Kriti Kanodia

A TV show in 2012 where actor Sonam Kapoor <g...

Mumin Can Eker,

Mumin Can Eker

Maseksport Inc is a readymade garment exporter. Founded in Izmir in 1989,...

Ritu Oberoi,

Ritu Oberoi

Established in 2018, Forsarees is a socially driven business enterprise,...

Daniel Roxbury, University of Rhode Island

Daniel Roxbury
University of Rhode Island

Assistant professor Daniel Roxbury and former URI graduate student...

Wolfgang Plasser, Lenzing AG

Wolfgang Plasser
Lenzing AG

The Lenzing Group is an international company headquartered in Austria...

Ian Russell, Pireta

Ian Russell
Pireta

UK-based Pireta has developed a unique free-form process to add durable,...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

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

Leave your Comments


May 2021

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


Advanced Search