WestPoint cuts loss amid sales slide
Home & Textiles Today Staff -- Home Textiles Today, August 12, 2008
New York – Although WestPoint Home’s sales continued to tumble in a tough retail environment, the company sliced its operating losses by more than half during the second quarter.
WestPoint, a division of Icahn Enterprises, reported an operating loss of $24.1 million for the quarter ended June 30 vs. an operating loss of $51.2 million in the previous year’s quarter.
By walking away from unprofitable business and shifting more production off-shore, WestPoint’s gross earnings/margins improved substantially – from a loss of $4 million last year to a positive $6.8 million, or 7.1% of sales during the recent quarter.
The division also chopped selling, general and administrative (SG&A) expense by 16% to $23.9 million. The company said it will continue to chip away at SG&A through consolidating locations, reducing headcount and paring expenses.
Restructuring and impairment charges were $7.0 million, compared to $20.4 million last year, when the company was closing down U.S. manufacturing.
Sales fell off $36.5% to $151.1 million, lead by a nearly 30% sales decline in bedding to $62.4 million. Sales in dropped 45% to $33.6 million.
For the first half of the year, operating loss narrowed to $48.0 million from $88.2 million.
Sales fell nearly 40% to $209.87 million. Bedding sales declined 36% to $135.7 million, while bath sells sank 44% to $74.2 million.
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