MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.
Details on Industry Insight.
The parent company of the Spy sunglass brand is in the midst of a 13-week plan to temporarily reduce employee expenses, according to its annual report filed this week with the Securities and Exchange Commission.
Orange 21 Inc. has temporarily reduced salaries and work schedules and implemented mandatory vacation leave.
The company reported sales of $47.3 million in 2008, a 2 percent increase. It recorded a $15.2 million net loss, including a non-cash accounting charge of $8.4 million. In 2007, Orange 21 had an $8 million loss.
Gross profit as percentage of sales was 45 percent, down from 49 percent in 2007.
Because of the slowing economy, the company cut $4.1 million in operating expenses in 2008.
Orange 21 is also in the midst of a fight with No Fear, which owns 14 percent of Orange 21's outstanding stock, according to the annual report. No Fear Retail in the U.S. and No Fear MX Europe combined owe Orange 21 $858,000 in past due balances for product No Fear bought from Orange 21.
Orange 21 has stopped shipping No Fear, and the two sides are in settlement negotiations, the annual report says.
Separately, Mark Simo of No Fear believes Orange 21 owes him $600,000 in compensation for his two-year tenure as CEO, which ended in 2008. The Orange 21 annual report says Simo previously declined compensation his first year on the job. The two sides are also in negotiations on this issue, though there's no guarantee of a resolution, Orange 21 said.
Going forward, Orange 21 believes one of its biggest growth opportunities is increasing sales to sunglass specialty and optical retailers, and the company is devoting resources to sell to that channel.