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 NEW YORK, Aug. 12 /PRNewswire/ -- The Gitano Group, Inc. (NYSE: GIT) today reported significant progress in repositioning itself strategically for the long term.
 In addition to achieving a substantially reduced loss in the second quarter of this year compared to a year ago, Gitano announced the completion of the sale of its Gloria Vanderbilt division and the Gloria Vanderbilt trademark, consistent with the company's objective of rebuilding around its core Gitano Brand wholesale apparel business. Gitano will use the funds from the transaction both for the paydown of debt and for operations. The terms of the Gloria Vanderbilt sale, to a private investor group including the current Gloria Vanderbilt management, were not disclosed.
 For its 1993 second quarter, Gitano substantially reduced its loss both on a net and an operating basis compared to a year ago. Overall, the net loss for the 1993 second quarter was reduced to $39.7 million, from a net loss for the 1992 second quarter of $95.1 million. The 1993 second quarter net loss included a special non-cash operational restructuring charge of $17 million related to the Gloria Vanderbilt transaction. The loss also included a special reserve of $11.8 million for the settlement of certain pending shareholder litigation.
 On an operating basis, after excluding all restructuring costs and special reserves, Gitano reduced its operating loss to $5.1 million for the second quarter of 1993 from $43.9 million for the second quarter of 1992, and to $3.3 million for the first six months of 1993 from $32.6 million for the first six months of 1992.
 Robert E. Gregory, Jr., Chairman and Chief Executive Officer, stated, "One of the most significant elements of our second-quarter results is the sizeable reduction we have been able to achieve in Gitano's selling, general and administrative expenses. Total SG&A for the 1993 second quarter was reduced to $15.6 million or 19.2 percent of net sales compared to $50.1 million or 23.8 percent of net sales for the comparable 1992 period. We are refocusing Gitano's resources on its Gitano Brand wholesale apparel business, and, while we expect continued operating losses over the next few quarters, such losses should continue to be narrower than for the comparable prior-year quarters." Over the past year, The Gitano Group has been refocusing its business around its core Gitano Brand wholesale apparel business. Specifically, Gitano sold the Gloria Vanderbilt business, Accessory Network, the intimate apparel division, and its private-label business. The company also closed its Regatta division, shut down virtually all of its manufacturing facilities, and exited the retail apparel business. As part of this process, Gitano has substantially reduced its work force. At July 1993, Gitano's domestic work force was approximately 600 compared to approximately 3,600 at mid-year 1992 and approximately 1,300 at year-end 1992.
 Gitano also announced that it made its latest bank payment on July 30, 1993, slightly ahead of schedule.
 Gitano is a leading supplier of branded, high quality apparel to mass merchants and discounters.
 Selected Financial Data
 (Unaudited, dollar in thousands, except per share date)
 Quarter Ended Six Months Ended
 7/3/93 7/4/92 7/3/93 7/4/92
 Net Sales $ 81,670 $210,115 $225,733 $444,212
 Cost of Sales 71,153 203,906 191,155 380,355
 Gross Profit 10,517 6,209 34,578 63,857
 12.9 pct. 3.0 pct. 15.3 pct. 14.4 pct.
 Selling, distribution,
 general and
 expenses 15,646 50,084 37,869 96,502
 19.2 pct. 23.8 pct. 16.8 pct. 21.7 pct.
 Provision for doubtful
 amounts due from
 affiliates and
 related amounts -- 32,581 -- 32,581
 costs 16,998 10,453 16,998 10,453
 20.8 pct. 5.0 pct. 7.5 pct. 2.4 pct.
 Loss from
 operations (22,127) (86,909) (20,289) (75,679)
 Other income (1,095) (12) (2,452) (151)
 settlement costs 11,800 -- 11,800 --
 Debt restructuring
 costs 539 2,177 1,654 2,177
 Interest expense
 and other
 financing costs 6,279 6,077 12,412 11,015
 Loss before
 provision (benefit)
 for income taxes (39,650) (95,151) (43,703) (88,720)
 Provision (benefit)
 for income taxes 20 (1,215) 50 271
 Loss before
 debit (39,670) (93,936) (43,753) (88,991)
 Extraordinary debit
 - reversal of income
 tax reduction
 arising from
 U.S. operating
 loss carryforward
 recognized in prior
 interim period -- 1,165 -- --
 Net loss ($39,670) ($95,101) ($43,753) ($88,991)
 Earnings per share
 of common stock:
 Loss before
 debit ($2.48) ($5.87) ($2.74) ($5.56)
 Net Loss ($2.48) ($5.94) ($2.74) ($5.56)
 Weighted average
 common shares
 outstanding 15,978,717 15,998,717 15,978,717 15,998,717
 Note: Certain prior year amounts have been reclassified to conform to the 1993 presentation
 -0- 8/12/93
 /CONTACT: Robert D. Siegfried or Roy Winnick both of Kekst and Company, 212-593-2655, for Gitano Group, Inc./

CO: Gitano Group, Inc. ST: New York IN: TEX SU: ERN

LD -- NY089 -- 2329 08/12/93 17:44 EDT
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Publication:PR Newswire
Date:Aug 12, 1993

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