Direct Sales Drop 5.4% at Frederick’s of Hollywood

Bucking a trend seen by b-to-c retailers, poor sales in its direct channels has hurt apparel merchant Frederick’s of Hollywood. Though company chairman and CEO Thomas Lynch attributed a net sales decrease for the second quarter ended Jan. 28 to post-Christmas clearance sales, it was the second straight quarter that direct channels have put Frederick’s sales in the red.

For the quarter, net sales at Frederick’s decreased less than 1% to $32.5 million from $32.6 million. While store sales increased 5.3%, its catalog and website sales decreased 5.4%.

The merchant’s gross margin, as a percentage of net sales, was 31.2% compared to 35.0%. This decrease was primarily attributable to an increase in shipping offers as well as product promotions during the month of January 2012 to stimulate sales of clearance merchandise in a promotionally competitive environment.

For the first six months of its fiscal year, net sales shrunk just $0.3 million. Total store sales increased 4.2% to $38.2 million, while direct sales dropped 5.5% to $20.1 million.

Lynch said in a press release that the company hopes sales will turn around with expanded product categories and to ensure those products meet current trends.

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