Mossimo Narrows Losses in 4th Quarter
Clothing designer Mossimo Inc. narrowed its losses significantly in the fourth quarter, the Irvine company reported Tuesday, indicating that its downsizing efforts are paying off.
Mossimo lost $2.6 million, or 17 cents a share, for the last three months of the year, compared to a loss of $13.5 million, or 90 cents a share, in the same period last year.
Sales declined 35% to $8.4 million from $12.9 million for the same period last year, as the company trimmed its product line and distributed to fewer stores.
Wall Street took little notice. Mossimo’s stock closed at $8.25 Tuesday, down 25 cents in New York Stock Exchange trading.
Mossimo tightened its belt last year, attempting to rebound from difficulties that arose after it tried earlier to shift from its roots in beachwear and casual clothing to more upscale fashions.
The company hired turnaround specialist John Brincko early in 1998 to help right its course. Brincko took a variety of cost-cutting steps, including moving the company into a smaller headquarters in Irvine.
On Dec. 1, founder Mossimo Giannulli relinquished half of his shares in the company to bring aboard a new chief executive, Edwin Lewis, a highly regarded industry veteran who had previously held the top job at Tommy Hilfiger Inc. Since then, four other former Hilfiger executives have signed on with Mossimo.
The cutbacks have continued under Lewis, who has decreased Mossimo’s personnel by about 27%, a cost saving the company says was not reflected in its year-end financial results.
“The progress that was made during 1998 underscores the company’s focus on improving profitability,” Lewis said in a statement. “With the company having met its objectives for 1998, we now look forward to greater opportunities ahead.”
Lewis could not be reached for further comment.
For the year, the company lost $13.8 million, or 92 cents a share, compared with losses of $18.7 million, or $1.25 cents a share, in 1997. Sales totaled $45.3 million, down 36% from $70.9 million.
