Mossimo Opts to Let Its Top Manager Leave

With sales falling and the company still posting losses, Mossimo Inc. said Monday that it will not extend the contract of Chief Executive John Brincko, hired in January to reverse the Irvine apparel designer’s downward slide.

Brincko’s one-year contract, which expires Dec. 31, included a six-month extension option, but the company said he will leave at the end of the year.

It is unclear who will take the reins after Brincko’s departure, but founder and Chairman Mossimo Giannulli, who also holds the title of “visionary,” could reclaim the top job.

“What Moss has said is he will either appoint a permanent chief executive or assume that role himself,” said spokeswoman Michele Feller. “John essentially is a turnaround specialist. He typically comes on board for a short time to implement changes that need to be made, and he’s done that.”

Brincko, 56, could not be reached for comment. Under him, the company has taken a variety of cost-cutting steps, including moving its headquarters to a much smaller building.

The belt-tightening has boosted the company’s gross profits and reduced both inventory and operating expenses.

“Those are some of the tangible things that have resulted,” Feller said.

Before Mossimo, Brincko engineered the turnaround of Sunworld International, a giant Coachella Valley produce grower, and had a less successful stint at the Barneys New York clothing chain.

Also Monday, Mossimo said it trimmed its third-quarter loss to $3.4 million, or 23 cents a share, from a $4.8 million deficit, or 32 cents a share, a year earlier.

The results include a $1.46-million charge to account for a reduction in the value of excess sunglass inventory, among other things. Excluding the charge, Mossimo’s third-quarter loss amounted to 13 cents a share, less than the 16 cents a share loss predicted by Wall Street analysts.

Last year’s third-quarter results included a $5.1-million charge for inventory shortages and settlements with some of its vendors.

Sales for the third quarter fell 33%, to $11 million, from $16.5 million a year earlier. The company said the lower numbers were the result of fewer sales through specialty stores and the severing of unprofitable accounts.

Mossimo, which got its start in trendy beachwear, has struggled since making the decision last year to move into more upscale fashion. The difficulties prompted a shake-up in management earlier this year, when Brincko replaced the 34-year-old Giannulli as chief executive.

Gross profit for the third quarter jumped to $1.6 million, or 15% of sales, compared with a loss of $576,000, or 3.5% of sales, a year ago, the company said. Operating expenses were $5.5 million, 29% lower than in last year’s third quarter.

The company also announced Monday that Francesca Luzuriaga has resigned from the board of directors, reducing the board to three members. Luzuriaga, an executive with Mattel Inc., has served on the board since 1996.

Feller said Luzuriaga recently assumed a new position with Mattel and believed she could not devote the necessary time to Mossimo. “For the good of the company, she has chosen to step down,” Feller said.

The company did not name a replacement.

Mossimo shares closed Monday at $3.13, down 13 cents, in New York Stock Exchange trading.

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More Mossimo Woe

Mossimo Inc., which posted its fifth consecutive quarterly loss, has seen the value of its stock decline about 50% since March. Net sales and income, in millions:

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Stock Trouble

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Monday’s close 3.13

Source: Bloomberg News