The fourth quarter 2000 gross profit included $500 thousand from the Flapdoodles
division, which was sold in December 2000.
The 46% decrease was due to the sale of the Flapdoodles
division in December 2000.
Matacia's BUY rating is based on her belief that Marisa Christina has a significant opportunity to enhance its brand equity as the resurgence of the Vittadini brand gets underway and as Flapdoodles
intensifies its presence within the department store channel.
The one-time Flapdoodles
charge as well as other negative factors, including a lackluster retail performance will cause us to have a significant loss in the fourth quarter of 2000, instead of the flat earnings that we had originally expected.
Lerner also commented, "In an effort to refocus our Flapdoodles
business into more productive markets, we made the decision to close twelve of our thirteen Flapdoodles
With the continued solid backlogs at both Marisa Christina and at Flapdoodles
we are confident that the Company is well on the road to recovery and we look forward to improved results in the future.
While sales at Flapdoodles
were lower, sales within our Marisa Christina product line continued to perform well during the quarter, more than offsetting this decrease.
Lerner concluded, "We are encouraged by the continued solid increases in our backlogs at Marisa Christina and recent trends in orders at Flapdoodles
While sales of Adrienne Vittadini and Flapdoodles
declined, we were pleased to have generated positive comparisons relative to last year in our core Marisa Christina lines due to new customers and increased distribution.
As previously reported, the Company's first quarter results reflect weaker sales and customer demand at the Marisa Christina and Adrienne Vittadini divisions which were only partially offset by the continued profitability of its Flapdoodles
The Company noted that while Flapdoodles
continued its growth and strong profitability, third quarter results were adversely impacted by weaker sales and customer demand at the Marisa Christina and Adrienne Vittadini divisions.