Sales Drop Hurts Cherokee’s Profit

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Cherokee Inc. said Tuesday that its second-quarter profit fell 29 percent as clothing licensing revenue dropped.

The Van Nuys company reported net income of $2.9 million (32 cents per share) for the quarter ended Aug. 1, compared with net income of $4 million (45 cents) a year earlier. Revenue fell 23 percent to $8.1 million.

The company said retail sales fell as less Cherokee apparel and accessories were sold at Target, one of its primary customers since the demise of Mervyn’s. The decline was partially offset by sales growth of the Norma Kamali line sold at Wal-Mart. The company also projected stronger international sales.

“Although we expect that retail revenues may continue to be soft through the rest of this year, we believe we will benefit from the growing revenue streams of our Cherokee brand in Brazil, Chile, Peru and India, as well as our upcoming launch in Spain,” said President Howard Siegel, in a statement.

Cherokee shares closed up 59 cents, or 3 percent, to $20.94 on the Nasdaq.