Sales for the first quarter increased by 1 percent, to $23.6m, compared to $23.3m a year earlier, with domestic sales increasing by 53 percent, offset by a decrease in international sales of 36 percent.
The company said that the performance in its international markets reflected the continued challenges presented by the economic downturn, challenges that were further compounded by the strength of the US dollar against international currencies.
Losses have been reduced
Net losses for the quarter were $2.46m, an improvement on the same period last year, when losses came in at $4.88m.
The company underlined that, despite cutting back on losses the credit crunch means that further borrowing is ‘unlikely’ as it is still over $6m in excess of its credit facility.
The reduction in losses was largely attributable to the company’s cost cutting program, which saw operating expenses decrease by 14 percent, brought about by a 17 percent reduction in advertising and promotions, 18 percent reduction in selling and distribution costs and general admin charges lowered by 17 percent.
Further cost cutting on the cards
“We continue, during the difficult economic time which has kept the consumer at home, to look at further cost cutting measures,” said CEO Neil Katz.
Looking to the future, Katz said that a raft of new star sponsored fragrance launches bearing names such as Jessica Simpson, Paris Hilton and Queen Latifah, were all set to be unleashed in the second quarter.
“We expect sales to increase in the second quarter over last year’s comparable period due to these new brands, despite the fact that the retail environment has not shown the same signs of improvement as other areas of the economy,” Katz added.