MANUFACTURING
Differential Brands Reports Second-Quarter Earnings Results
Differential Brands—the Los Angeles company whose labels include Hudson Jeans, Robert Graham and SWIMS—said its second-quarter sales for the period ending June 30 were down 1 percent from the same period last year to $36 million.
The company’s net loss increased to $5.7 million, up from $4 million during last year’s second quarter.
However, the company’s direct-to-consumer sales during the three-month period rose 8 percent.
“Our consumer-direct business continued its strong performance in the second quarter at both Robert Graham and SWIMS. Robert Graham’s assortment was embraced by its customers for Spring, and we are optimistic for the Fall offering based on customer feedback thus far,” Michael Buckley, the company’s chief executive, said in a statement. “SWIMS’ expanded Spring assortment was in high demand during the second quarter as continued improvement in general-brand awareness in North America also played a major role. This momentum bodes well for the Fall season.”
In June, Differential Brands announced it was buying a significant share of Global Brands Group’s licensing business in North America. The deal is valued at $1.38 billion and should close some time in the third quarter, Differential Brands said. The purchase price will be paid in cash.
The brands that make up the North American licenses include Calvin Klein, Under Armour, Tommy Hilfiger, BCBG, Bebe, Joe’s, Buffalo David Bitton, Frye, Michael Kors, Cole Haan, Kenneth Cole, Disney and Star Wars.
Before becoming Differential Brands Group, the apparel venture operated as Joe’s Jeans, which hit a financial hurdle in 2013 when it borrowed $90 million to buy Hudson Jeans for $97.6 million and then defaulted on its loans.
The company was close to declaring bankruptcy in 2015 but ended up selling its flagship brand, Joe’s Jeans, to Sequential Brands Group and Global Brands Group for $80 million. Funds from the sale were used to retire Joe’s Jeans’ debt.
The Hudson label remained behind and the company was merged with the high-end label Robert Graham and then combined under the Differential Brands Group corporate name, which is publicly traded on the NASDAQ.
SWIMS is a Scandinavian brand that Differential Brands acquired in 2016.
