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PICKERINGTON, Ohio (May 5, 2009)—In the third quarter, ended March 28, 2009, R.G. Barry Corporation (DFZ) saw net sales increase 4.4 percent from the prior year to $21.1 million. Despite posting solid sales, the company saw gross profit shrink 11.3 percent to just over $7 million, versus nearly $8 million in the third quarter of fiscal 2008.

During the same period the company saw net earnings decrease drastically, dropping 90 percent to $123,000, versus $1.2 million for the corresponding period last year. The earnings drop is less dramatic in year-to-date financials, which show the company at $7.3 million for the first three quarters of fiscal 2009, down only 20 percent when compared to the same period of 2008.

“We are pleased with the gains reported today, and we remain confident about the overall direction of our business,” says Greg Tunney, CEO and president. “This is our seventh consecutive quarter of positive earnings and healthy sales despite the most difficult economic conditions in recent memory and retail’s continuing loss of doors to bankruptcies, closings and consolidations.”

With regard to the drop in gross profit, Tunney adds, “The contraction in gross profit percentage evident in today’s report was not unexpected. The erosion is the residual impact of inflationary pressures experienced last year when we locked in pricing with our suppliers, increased promotional support for retailers during the difficult 2008 holiday season and a shift in third quarter product mix to lower margin channels. We expect the gross profit percentage to improve in fiscal 2010.”

In a separate release, R.G. Barry announced plans to reduce its board of directors from 10 members to nine. The decision, unanimously voted by the board, will occur in connection with the company’s 2009 shareholders meeting.

“We view this as a significant step in efforts to make our board more efficient and economical,” explains chairman of the board Gordon Zacks. “The board will continue evaluating our performance and adapting to maximize the board’s contribution and value to our shareholders.”

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