CROCS’ GOING CONCERN: The future of Crocs Inc. was called into question by its accountants last week. Deloitte & Touche said its annual review of the firm’s books raised “substantial doubt about the company’s ability to continue as a going concern,” according to Crocs’ annual report filed with the Securities and Exchange Commission. As of Dec. 31, the company had $51.6 million in cash and cash equivalents and $22.4 million in borrowings under a credit facility maturing April 2. Crocs said it was in talks with its lenders to extend the current facility and is also trying to obtain an asset-backed lending arrangement and exploring other methods of raising capital. The company, which tapped former Reebok exec John Duerden as CEO last month, lost $185.1 million last year, down from earnings of $168.2 million in 2007, and has taken steps to reduce its cost base, including the rationalization of its manufacturing base and consolidation of distribution centers. “As a company, we continue to have confidence in our business and our ability to navigate through these difficult economic conditions,” said a company spokeswoman last week. — EVAN CLARK
THE CARNIVAL’S LOSSES: The fourth quarter was not kind to Shoe Carnival Inc., and the 308-door chain said it was prepared for the hard times to continue. Losses for the quarter ended Jan. 31 totaled $3 million, or 24 cents a share, contrasted to earnings of $1.1 million, or 9 cents, a year earlier. Sales dipped 4.5 percent to $156.9 million from $164.3 million as comparable-store sales fell 8.3 percent. The firm generated free cash flow of $13.9 million in fiscal 2008 and ended the year with cash and cash equivalents of $24.8 million and no interest-bearing debt. “We expect the retail footwear environment will continue to be challenging, at least through the first half of fiscal 2009,” said Mark Lemond, CEO and president. “We have planned our advertising, sales promotions and inventory strategies accordingly. Our inventory levels at year-end leave us well positioned for both spring transition and market-place purchasing opportunities. Our priority for 2009 is to manage our business to increase market share, generate free cash flow and maintain our strong financial position.” — E.C.
R.G. BARRY REJECTS SUITOR: R.G. Barry Corp. said its board of directors unanimously rejected an unsolicited acquisition offer made by Mill Road Capital on Jan. 28. Chairman Gordon Zacks said the board decided the offer did not provide the value that would be in the best interest of R.G. Barry’s shareholders. Details of the proposed deal were not provided. “Because we believe that our business plan is likely to deliver greater value to our shareholders over time,” said Zacks, “the board concluded that the Mill Road proposal does not merit further consideration.” Greg Tunney, president and CEO, added that the Pickerington, Ohio-based company will continue to introduce new products to new channels and explore targeted acquisitions and other growth initiatives. “We believe our share price is undervalued in the current depressed stock market and does not reflect the true value of our business,” Tunney said. The firm’s stock closed at $6.05 Wednesday and has traded as high as $8.84 and as low as $4.85 over the last 52 weeks. —JOCELYN ANDERSON
PRICE WATCH: Retail prices for footwear rose a seasonally adjusted 0.7 percent in February and advanced 1.6 percent year-over-year, according to the Labor Department’s Consumer Price Index. Women’s footwear prices increased 2 percent for the month, and declined 0.3 percent compared with February 2008. Men’s footwear prices increased 0.7 percent in February, and advanced 3.3 percent from a year earlier. Boys’ and girls’ footwear prices fell 1.8 percent month-to-month, but rose 3.2 percent year-to-year. Prices for all goods and services across the economy advanced 0.4 percent in February, and increased 0.2 percent versus a year earlier. The February rise, supported by higher energy prices, was the largest since July 2008. —LIZA CASABONA