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CARLSBAD, Calif. (Apr. 21, 2009)—Phoenix Footwear Group, Inc. (PXG) announced financial results for the fourth quarter and full 2008 fiscal year, ended January 3, 2009, which showed decreased sales and increased losses.

The company’s net sales for the fourth quarter were $16.5 million, a 15 percent drop from the fourth quarter of 2007 when net sales reached $19.4 million. Citing an unusually weak retail environment, full year net sales were down 9 percent to $75.1 million, versus $82.9 million in 2007.

For the full year, Phoenix’s net loss from continuing operations totaled $18.8 million inclusive of $10.8 million in non-cash impairment charges. This figure compares with a net loss of $16.6 million in 2007, inclusive of $6 million in impairment charges.

Both the accessories and footwear segments of the business saw decreased net sales in fiscal 2008—down 10 and 9 percent, respectively, compared with 2007 figures. The decrease in footwear sales was felt across all distribution channels, including independent retailers, department stores and catalog vendors.

“With the economic headwinds, this past year was an especially challenging one,” says Phoenix Footwear Group, Inc. president and CEO Russell Hall. “We are disappointed in our net sales decline and resulting net loss; however we have made some important gains in managing our inventory and gross margins and in restructuring and right sizing our business as detailed in our annual report on Form 10-K for fiscal 2008 which we filed today with the SEC. Our productivity improvements, combined with our new organizational structure, position us to produce better results once retail conditions normalize.”

During the first quarter of 2009, Phoenix has made moves to cut costs and make the business more profitable. Specifically, this first-quarter restructuring included: terminating the company’s Tommy Bahama license agreement, making the decision to sell the Chambers private label accessories business and eliminating a total of 16 managerial and support positions.

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