New York-based apparel cataloger/retailer J. Crew slashed its first-quarter operating loss but nonetheless saw its net loss for the quarter widen. For the three months ended May 1, the company’s operating loss was $2 million, down from $10 million a year ago. The company attributes the reversal to its new merchandise strategy. The net loss for the quarter just ended was $23 million, compared with $20 million last year, due to a newly required inclusion of preferred dividends ($8 million) as interest expense in 2004. Last year, the dividends were recorded as a direct charge to stockholders’ deficit.
Consolidated revenue for the first quarter decreased 10%, to $145 million from $161 million last year. The decline was due to a 34% decrease–$19 million–in net sales of the direct business. The decrease resulted from reductions in catalog pages, circulation, and clearance sales. Retail sales increased to $104 million from $98 million last year.