Kenneth Cole reported a net loss of $3.7 million for the quarter ended June 30, compared with income of $0.6 million in the year-earlier period. At 40.6 percent, gross profit as a percentage of revenues was unchanged.
Net revenues went down to $97.3 million from $102.2 million the previous year. Wholesale revenues decreased by 3.3 percent to $50.3 million, primarily from private label footwear and Reaction handbags. Consumer-direct revenues decreased by 6.1 percent to $37.2 million, due to the closure of two stores and a comparable store sales decline of 2.7 percent. Licensing revenues declined by 7.8 percent to $9.8 million.
Operating costs rose from 39.6 percent to 44.9 percent of revenues. In the quarter, the company incurred charges for transition costs to a new distribution center as a result of the insolvency of one of its third-party logistics operators, as well as professional service costs in connection with the proposed acquisition of the company by a group led by its designer, Kenneth D. Cole. Excluding these items, adjusted SG&A in the second quarter was $39.7 million, or 40.8 percent of revenues.