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Quaker goes from black to red

FALL RIVER, Mass. -- Hammered by falling sales and weakening demand for its woven fabrics, which put margins under pressure, Quaker Fabrics Corp. recorded a first quarter loss of $3.1 million, reversing a year-before profit of $2.4 million.

Sales at the producer of woven and jacquard upholstery fabrics plunged 29.8 percent, to $59.2 million from $84.4 million last year, a shortfall of more than $25 million. With sales skidding, average gross margin eroded 920 basis points, or 9.2 percentage points, to 13 percent from 22.2 percent the prior year. Gross margin dollars were slashed by more than half, falling 58.9 percent, to $7.7 million from $18.7 million.

In a drive to contain losses, Quaker slashed its operating costs 13.4 percent, to $12.1 million from $14 million, generating a cash savings of $1.9 million. But when measured as a percentage of falling sales, costs climbed 390 basis points, or 3.9 percentage points, to 20.5 percent from 16.6 percent a year ago.

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