Operating losses at Ben Sherman widened over the second quarter as the young fashion brand was hit by currency fluctuation and a decline in wholesale order shipments.
The young fashion brand saw operating losses widen to $6.3 million (£3.8m) over the three months to August 1, from $2m (£1.2m) over the same period the year before. Sales fell to $23.6m (£14.4m) compared to $32.5m (£19.8m) during the second quarter of 2008.
The brand said that the reduction in sales was due to an 18% reduction in the average pound to dollar exchange rate and that challenging market conditions had hit wholesale shipments.
During the second quarter, the business made strategic moves to cut costs and reduce losses, including the closure of the Ben Sherman in-house footwear and kidswear businesses. Both categories have migrated to a licensee business so Ben Sherman could extract working capital, and move towards a new stream of royalty based income.
“While [these] second quarter financial results were clearly not what we strive for, we believe the management team is making the right moves, and we believe firmly in the future of the Ben Sherman brand,” the company said in a statement. “We have made significant expense reductions and expect our second half to be materially better than the first half due to our efforts and the seasonality of the brand.”
Hudson Shoe Company now operates the Ben Sherman footwear license, and a new Ben Sherman kidswear licensee will be announced shortly.
The brand added that new German standalone stores in Berlin and Cologne had been performing well, and that in a few weeks Ben Sherman tailoring licensee Baird Group will open a Ben Sherman tailoring store on Savile Row in London.
Ben Sherman is owned by US supply group Oxford Industries.