Cost Cutting, E-Commerce Trim Frederick's Of Hollywood’s Loss

Whether the result of cost cutting or improved e-commerce operations, direct sales from Frederick’s of Hollywood held their own during the company’s second quarter, and slipped less than retail sales did during its first half.

Overall, the intimate apparel marketer’s net sales dropped from $52.5 million during its fiscal second-quarter 2009 to $41.3 million during the most recently ended second quarter. Sales for the first half of 2009 were $95.1 million, falling to $78.5 million during the first half of 2010.

In its most recent quarter, Frederick’s generated a $4.7 million net loss, compared with a $20.1 million net loss a year earlier. Its net loss for the first six months of its fiscal year was $9.1 million, down from $25.2 million.

Broken out by channel, total store sales during its second quarter dropped 6.5% from second-quarter 2009’s level, while comparable store sales fell by 5.3%. But direct sales, which include the company’s catalog and Web site operations, were flat.

For the first half of the year, both total store sales and direct sales fell by 4.7%. The company did not offer comparable store sales figures.

"Our results for the second quarter benefited from the closing of underperforming retail stores and strengthening our e-commerce capabilities over the past year,” chairman and CEO Thomas Lynch said in a statement. “Overall, the cost control measure we have put in place have reduced expenses significantly.”

Most of these cost reductions came in the costs of goods sold, buying and occupancy. The company’s selling, general and administrative expenses were in line with the previous year’s levels.