Garment Industry

The garment industry is tied in knots over reports that CIT Group Inc. could file for bankruptcy. Scores of Los Angeles businesses in the apparel industry rely on CIT for upfront financing, which provides them with cash until retailers pay their bills. Now that the New York commercial lender is on the brink of bankruptcy, local business owners are wondering how they'll get by. Many are scampering for alternatives to keep business moving. It isn't that easy.

The reality television show "Project Runway" this season is putting the spotlight on Los Angeles, where designers toil in a loft downtown, competing to win $100,000 to start their own clothing line. The local industry could use the boost. L.A.'s once-flourishing garment design and manufacturing industry is shedding jobs as quickly as a mohair sweater loses its fur. Weak U.S. consumer spending is generating less demand for the services of the people who stitch, cut and sew clothing in Los Angeles County.

Levi Strauss & Co. ended its latest fiscal year on the upswing, but it still wasn't enough to prevent the jeans maker from suffering its ninth annual sales decline in the last 10 years. The San Francisco-based company said that it earned $95.7 million for the three months ended Nov. 28, more than doubling from net income of $43.6 million a year earlier. Levi is privately held but discloses its results because some of its debt is publicly traded.

Guess Inc., with its trendy apparel business on a roll and its European sales swelling, is moving ahead with plans to woo younger shoppers this year with more affordable clothes. While reporting its latest robust quarterly sales and 77% jump in profit, the company said Wednesday that its first G by Guess store would open in April at the North County Mall in Escondido. An additional 24 stores will open by the end of July.

Gap Inc. said profit fell for a sixth straight quarter after it increased discounts to help clear out unsold clothes at Old Navy and its namesake stores. Earnings and sales exceeded analysts' estimates, and Gap said it was close to hiring a search firm to find a replacement for former Chief Executive Paul Pressler. The company plans to open about 230 stores this year, mostly Old Navy locations, and shut about 200 sites, mostly Gap stores.

Department store impresario Marshall Field's strategy in the late 19th century was as simple as it was sure-fire. "Give the lady what she wants." It helps, of course, to know what that is. As retailers face mounting pressure to cut costs, boost profits and tag trends, they also are searching for something a little more old fashioned: merchants who know what will sell. "This is the single biggest issue we face," Urban Outfitters Inc.

Teen-oriented retailer Hot Topic Inc. said its fiscal fourth-quarter profit fell 16% as higher expenses offset sales gains. Net income for the City of Industry-based company decreased to $8.9 million, or 20 cents a share, from $10.6 million, or 23 cents, a year earlier. Revenue grew 4% to $240.5 million. Analysts had forecast a profit of 21 cents a share on revenue of $238.6 million.

Eddie Bauer Holdings Inc. posted its first profit since becoming a public company. Net income was $63.2 million, or $2.11 a share, compared with a loss of $12.8 million, or 43 cents, a year earlier, the clothing retailer said. Revenue rose 1.5% to $381.9 million. Sales at stores open at least a year climbed 4.6%, the first increase since the company began reporting results at the beginning of 2006.

Teen retailer Pacific Sunwear of California Inc. on Thursday reported an 80% decline in quarterly profit that matched Wall Street estimates, hurt by store closure costs and higher markdowns during the quarter. It shares dropped 1% in after-hours trading after the company gave an outlook for the first half of fiscal 2007 that was below analysts' average expectations. The operator of the PacSun chain of surf-inspired clothing said net income for its fiscal fourth quarter ended Feb. 3 was $9.

Office supplies maker Avery Dennison Corp. said Thursday that it would buy clothing label maker Paxar Corp. for $1.3 billion in a bid to expand in the fragmented retail information and brand identification market. The deal values White Plains, N.Y.-based Paxar at $30.50 a share, a 27% premium over its closing share price Thursday of $24.03.