Sales fall at K-Swiss as Thai facilities close
K-Swiss has posted lower sales for its first quarter ended March 31. Global revenues fell 11% to $65.9 million during the quarter compared with $74 million during the prior-year period. Domestic revenues dropped 21.2% to $23.9 million, while international revenues fell 4% to $41.9 million.
Net loss for the first quarter was $4.7 million compared with a net loss of $1.1 million during the prior-year period.
In April, the company's contract manufacturer in Thailand, one of only three manufacturers used by K-Swiss in its global supply chain, ceased operations. As a result, it will not fulfil orders for approximately 700,000 pairs of shoes scheduled to be produced during the second and third quarters of 2010. Many pairs were being produced to fulfil orders for Latin America and, to a lesser extent, Europe. The firm hopes to secure production capacity in other facilities soon; however, assuming the company cannot fulfil any customer orders from previously scheduled Thailand production, it estimates a total impact of approximately $5 million in lost revenues during the second and third quarters of 2010.
The company expects full year consolidated revenues to be 5% to 10% less than 2009 figures.
