Cherokee Announces Loss of $4.9 Million

Cherokee Inc., the Sunland-based maker of apparel and footwear, reported a fiscal second-quarter loss of $4.9 million because of a $6-million charge to restructure and implement a new operating strategy.

Cherokee said that before the onetime charge its operating income for the quarter ended Nov. 27 was $838,000. In the comparable quarter a year earlier, the company had an operating loss of $747,000 and a net loss of $5 million. Sales in the latest quarter dropped 19% to $26 million, from $32.2 million a year earlier.

Bryan Marsal, Cherokee’s interim chief executive since the resignation of Robert Margolis last fall, said the $6-million restructuring charge included severance payments, write-downs of inventory and certain leases, equipment and other assets.

For the six months ended Nov. 27, Cherokee posted a loss of $4.6 million, compared with a loss of $9.3 million in the same period a year earlier. Sales for the six months totaled $60.1 million, down 18% from $73.1 million a year earlier.