Footwear was top of mind when New York-based Kenneth Cole Productions Inc. released second-quarter financial results on Thursday.
After announcing that earnings beat expectations by 10 cents (although still reporting a loss for the quarter), CEO Jill Granoff was bullish on the incremental relaunch of Kenneth Cole New York’s ladies’ footwear, which will roll out five styles today.
“We expect to sell through the entire initial deliveries at full price,” said Granoff on a conference call with analysts. “We have been in pre-sell mode for the past month … and we are very excited about what that represents.”
The new shoes employ patented 9-2-5 technology borrowed from the Gentle Souls brand, which was acquired by Kenneth Cole four years ago. The first collection using the technology will be sold exclusively in the brand’s own retail stores to “build momentum and drive traffic to our stores before we expand into wholesale distribution next year,” said Granoff. “Our goal [with this line] is ‘no markdown, no promotion.’”
However, the CEO said the company does plan to expand price points on the lower end of the spectrum. “We are just trying to be realistic in the new [retail] reality,” she said. “There will be some key [footwear] items under $100.”
Among the company’s key collections is Reaction footwear, which Granoff said has seen “improved traction in both men’s and women’s.”
For the period ended June 30, the firm reported a loss of $3.3 million, or 18 cents a diluted share, versus a loss of $2.1 million, or 11 cents, in the year-ago period. Revenues in the quarter fell 16 percent to $93.9 million, from $111.2 million in 2008. Analysts polled by Yahoo Finance had, on average, expected a loss of 28 cents a share on revenues of $93.8 million.
The company said its gross margin gained 100 basis points in the quarter to 42.4 percent of sales, from 41.4 percent a year ago. It cut inventory levels in three months by 28.2 percent to $35.1 million.