Cherokee Inc. reported a quarterly net loss of $9.1 million on Thursday, a 90 percent increase compared to the same quarter last year.
The fiscal second-quarter losses stemmed in part from the $9.6 million in restructuring and refinancing charges the company incurred as it downsized its business operations and renegotiated its long-term debt.
Revenues dropped 10 percent for the quarter, which the Sherman Oaks-based apparel brand manager attributed to its transition from direct-to-retail licenses in the United States to wholesale licenses.
In June, Cherokee sold its Flip Flop Shops retail chain to footwear manufacturer Bearpaw Holdings LLC for an undisclosed amount, reflecting a shift back to its core licensing strategy.
“We restructured and realigned our business operations, converted our remaining indirect sales business to a licensing model, shored up our financial and liquidity position, divested non-core assets and positioned our brands and licensees for future growth,” Cherokee Chief Executive Henry Stupp said in a statement.
In August, the company refinanced its debt with a $40 million loan from Gordon Bros. Finance Co., increasing its overall liquidity and raising its long-term debt obligations from $45.2 million to $53.5 million.
Cherokee (CHKE) stock rose a fraction of a cent, or around 2 percent, on Thursday to close at 87 cents on the Nasdaq.