And analysts said Paul Blum, appointed the firm’s CEO in June, is on the right track to revitalize the business, although it is too early to declare a turnaround.
Speaking to analysts on a call last week, Blum said, “We know we can perform better in footwear, especially women’s footwear. Our men’s footwear business is much stronger and developing in the way we want it to develop.”
Blum added that the firm “will breathe new life and an entrepreneurial spirit into our footwear division. We know our brands are still strong in this category, but the business just doesn’t reflect it. We’ve cleaned up our inventory, and as our product gets better, our wholesale footwear business should improve,” he added.
Sterne Agee analyst Sam Poser said the firm must focus on injecting more fashion into its women’s lines. “No guy wearing men’s Reaction would date the girl wearing women’s Reaction. Paul is the first senior executive to acknowledge such a problem exists. We look forward for the dating to begin.”
Jeff Van Sinderen, an analyst at B. Riley & Co., said, “Paul is attacking [the product problem], reorganizing and restructuring the whole design and development team. He’s doing the right things.”
The firm also plans to aggressively grow its international segment, which accounts for about 15 percent of total revenue, through the consumer-direct channel.
Kenneth Cole posted a 38 percent decline in second-quarter profit, which slipped to $579,000, or 3 cents a share, on shrinking sales and margin. In the third quarter, the firm expects earnings per share to be 29 cents to 31 cents, versus 11 cents a year ago. The news sent its shares up 5 percent to close at $13.27 last Wednesday.