Perry Ellis International said it is open to any potential suitors for its Jantzen Swimwear business, which has the license for Nike Swimwear and Tommy Hilfiger Swimwear. That revelation came at the tail-end of the company’s conference call to discuss Q3 results.

The swimwear business, which was basically flat to down a little bit for the period, was a 10 cents per share drag on overall sales for the period.

PERY, which also markets PING apparel and Redsand apparel, reported that total revenue inched up 0.8% to $160.7 million for the quarter ended October 31, compared to $159.5 million in the year-ago period. Net sales, excluding royalty income, was essentially flat at $154.7 million.

Net income jumped 329% to $7.2 million, or 72 cents per fully diluted share, from $1.7 million, or 18 cents per fully diluted share, in the same period last year.
The prior year quarter included a 51 cents charge for certain note refinancing expenses. Excluding the charge, diluted EPS was up 4.3% for the period.

The company said the swimwear business was impacted by “lower than anticipated margins” due to higher markdowns to help liquidate the 2004 line. They are planning the swimwear business down about $20 million to $70 million next year.

Management committed to making changes that will position the swimwear business to be a positive contributor next year. As part of that process the company has reduced the Jantzen workforce by approximately 25% and cut other expenses to net an estimated $4 million in savings next year. They also said it would be helpful if they could “re-adjust” their relationship with Nike and Hilfiger, indicating that those deals were negotiated when Jantzen was under the VF Corp. umbrella.

Swim inventories are down 30% from last year’s levels at quarter-end.

In other areas of the business the PING apparel line reportedly “grew significantly” and the company launched PGA Tour apparel at JC Penney in the quarter. Management said they were “bullish” on Redsand and seeing growth at specialty retailers and PacSun.


>>> You would think these guys would talk to Nike and Tommy first before going public with these comments