Icahn execs optimistic brands will lift WestPoint
Retail Editor 4 -- Home Textiles Today, August 7, 2013
New York - Despite a double-digit decline in WestPoint Home's second quarter sales, executives at company parent Icahn Enterprises told analysts they expect brands to help boost the home textiles manufacturer's performance in the coming months.
During this morning's quarterly conference call, Icahn Enterprises president and ceo Daniel Ninivaggi referenced two relatively recent brand licenses for WestPoint, Southern Tide and Under the Canopy. In addition, he said the mill's legacy brands are being deployed more effectively, "focusing in on customers where there's better alignment, strategic alignment."
WestPoint is deemphasizing commodity products and high-volume/low-margin accounts, he added, "and focusing higher on the value chain. And so far, that's worked pretty well, although we've been disappointed on the sales."
Executives attributed the second quarter sales decline to the loss of largely unprofitable programs.
For the second quarter ended June 30, sales fell 21.5% to $51 million and net loss widened from $2 million to $3 million. Adjusted EBITD A(earnings before interest, taxes, depreciation and amortization) close to break-even, compared to $2 million in the year-ago period.
For the first six months of the fiscal year, sales dropped 20.5% to $97 million. Net loss narrowed by almost half: down to $6 million from $11 million during last year's first half.
SungHwan Cho, Icahn Enterprises cfo, said: "The challenge now is to grow the top line and we are optimistic in our prospects as we have been successful signing up some up-and-coming brands."
The improving housing market also provides cause for encouragement, said Ninivaggi.
"And these things do take some time to get traction. You just don't roll out a brand and then in six months later, you see it in sales," he said. "We're very happy with the management team there. I think they're doing a great job. And we're confident, in a longer term. But again, we're keeping an eye on that sales backlog to make sure the strategy stays on track."
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