Despite an increase in its retail business, American Apparel's (asi/35292) net sales dropped 1% year-over-year in August, a decline driven by a dip in the Top 40 supplier's wholesale channel. The 6% decrease in wholesale business, which includes sales to the advertising specialty industry, was primarily the result of a difference in the placement of month-end customer orders compared to last year, said CEO Dov Charney. "We expect a return to positive sales growth for the wholesale segment in September," he said, in a statement.
Overall, total net sales at American Apparel in August were $55.7 million. Comparable retail store sales rose 2%, while online business grew by 11%. The August performance follows a second quarter in which American Apparel increased company revenues by 9%, including a 16% jump in the wholesale channel.
Nonetheless, costs associated with a new distribution center and measures the company took to improve distribution operations resulted in a net loss of $37.5 million in the quarter. In announcing American Apparel's August performance, however, company executives said substantial progress has been made on the center and operations, boding well for the future. "We believe as much today as ever before that once the transition is completed, the new center will improve efficiency for years to come and allow us to accelerate the growth of our retail, online and wholesale business," the company said.
Ranked as the 14th largest supplier in the industry by Counselor, American Apparel reported 2012 North American ad specialty sales of $96.8 million, a 7.3% year-over-year gain.