After incurring a larger loss in the fourth quarter, Phoenix Footwear Group announced Tuesday efforts to significantly streamline its business.
The Carlsbad, Calif.-based company’s net loss increased by 10 percent to $14.2 million, or $1.74 a share, in the fourth quarter, versus last year’s fourth-quarter loss of $12.8 million, or $1.59.
Revenues for the fourth quarter dropped by 15 percent to $16.5 million, from $19.4 million in the fourth quarter of 2007, led by a 9 percent decrease in the company’s footwear sales. Footwear sales for Phoenix’s licensed Tommy Bahama, Trotters, SoftWalk and H.S. Trask businesses totaled $37.7 million, versus $41.3 million in the same period last year.
For the full year, Phoenix’s net loss increased by 12 percent to $18.8 million, or $2.31 a share, from the fiscal 2007 loss of $16.6 million, or $2.07. Losses in fiscal 2008 included a pre-tax, non-cash goodwill impairment charge of $10.8 million, related to fair valuation, versus similar impairment charges of $6 million for fiscal 2007.
At the prompting of BB&T Capital Markets, which was hired in November to explore strategic alternatives for the company, Phoenix has exited the Tommy Bahama business. It had held the footwear and accessories license since 2005, when it acquired Paradise Shoe Co. The Tommy Bahama division had incurred operating losses of $2.4 million in fiscal 2008 and $3.5 million during fiscal 2007. Phoenix expects to reduce its bank debt by $2.5 million with associated working capital from the Tommy Bahama business.
Phoenix will also exit its Chambers belt and accessories business, and its Wrangler belt and accessories license, which the company expects Wrangler to take in-house when the deal expires at the end of 2009.
While the company had hinted in February, when CEO Cathy Taylor stepped down, that Taylor could make a play to purchase the company, Phoenix made no mention of any possible sale in its most recent financial statements.
The stock closed on Tuesday at 27 cents, up 29 percent.