Danier Leather starts strategic review as profits plummet

Fashion designers Kirk Pickersgill, left, and Stephen Wong, right, the designers behind Greta Constantine pose for a photo at Danier Leather at the Yorkdale Shopping Centre in Toronto on August 17, 2011. (Aaron Vincent Elkaim / The Canadian Press)

TORONTO -- Danier Leather Inc. is exploring its strategic alternatives after reporting fiscal 2015 second-quarter results that came in sharply lower than last year.

The well-know retailer of leatherwear and accessories says alternatives could include anything from a debt or equity offering to the sale or lease of assets or possibly a merger or strategic alliance.

Danier says a special committee of independent directors has been formed to look at alternatives but no definite timeline has been established and "no decision on any particular alternatives has been has been reached at this time."

The company said it does not intend to disclose further developments until its board approves a specific transaction or concludes the review.

Danier reported after markets closed Friday that net earnings in the second quarter were just half those of the comparable year-earlier period, falling to $3.5 million or 89 cents er diluted share from $6.9 million or $1.73 in the prior-year period.

For the year to date, the company has a net loss of $2.4 million or 63 cents per share, compared with net earnings of $3.3 million or 84 cents in the first six months of the previous year.

Sales in the second quarter of fiscal 2015 decreased by 10 per to $55.7 million compared with $62 million in the second quarter last year.

Over the same period, comparable store sales decreased by 13 per cent.

Year-to-date sales have decreased by 12 per cent or $9.9 million to $76.3 million, while comparable store sales have decreased by 14 per cent.

"Revenue during the relevant periods was adversely affected mainly as a result of shifts in the marketplace and a highly promotional retail environment," the company said.