Mossimo’s Summer Line: Styling Back in the Black

Struggling apparel maker Mossimo Inc., after restructuring operations and cutting costs, returned to profitability in the second quarter--just barely.

After a string of disappointing quarters resulting in part from costly production and distribution snafus, the Irvine company said it earned $45,000 in the quarter ended June 30. A year earlier, Mossimo had net income of $4 million, or 26 cents a share.

Sales fell 30% to $18 million from $25.6 million.

The company said the results were in line with its expectations.

“Management’s aim has been to improve production, improve distribution and improve the whole design process,” said John Bower, Mossimo’s vice president of finance. “We’ve made significant progress in that.”

Mossimo’s stock has plummeted since reaching a high of $50.125 a share in June 1996, falling below $6 a share earlier this year. On Tuesday, it closed at $8 a share, up 25 cents, on the New York Stock Exchange.

Bower said sales dropped in the second quarter because the company moved away from merchandise targeted at 13- to 25-year-olds sold in surf shops and specialty stores. Instead, the company began focusing on more expensive sportswear sold in department stores and aimed at somewhat older men and women.

The fall line is currently being shipped to stores, Bower said. “Now, it’s ultimately up to the consumer.”

Mossimo is also testing a new apparel line, Moss, that will return the company to its surf and specialty shop roots with shorts, T-shirts and other active-wear aimed at younger customers. If it goes forward, the line will debut in spring 1998, Bower said.

For the six-month period, the company lost $453,000, or three cents a share, compared with net income of $8 million, or 54 cents a share, in the first half of 1996. Net sales declined 15% to $42.6 million from $50 million.