Sales for the full year, ending March 31, were up 14 per cent, from $134.36m (€86.20m) to reach $153.70m, which the company said was attributable to the continued success of its existing brands, including the flagship Paris Hilton fragrance line. But perhaps most significantly, the results showed that the company has managed to pull itself out of a tricky situation, having converted big operating losses for the financial year 2006 into a healthy profit. Operating losses become profits This meant that losses from continued operations for the year were $5.01m, compared to an operating loss of $27.86m for the financial year 2006. This increase in production efficiency coupled with the improved sales results meant that net income increased by 73,8 per cent, from $2.88m to $5.04m. "The company achieved a $51m improvement in income from continuing operations before income taxes, on a year to year basis, which underscores our success in restructuring our operations and refocusing our business," said Neil Katz, company CEO. Operations restructured "We have reduced our operating costs by 33 percent by centralising warehousing and distribution in New Jersey and moving all corporate management and administrative activities into new offices in South Florida." Katz also pointed out that over the year the company has managed to reduce inventories by 34 per cent - a problem that had caused many industry observers to raise eyebrows over the state of the company's affairs last year, when it underwent a bitter executive power struggle. Meanwhile, expenses have also been cut back considerably, with the management noting that advertising expenditure was cut back by 22 percent, despite the big rise in the sales for the year. Investment in brand portfolio Having sold its licensing rights for the Perry Ellis brand last year, the company's profits were impacted, but investment in its other brands, which also include XOXO, Queen Latifah, Jessica Simpson and Ocean Pacific has helped the company to pull through. The company says that, thanks to its improved cash flow situation, it is now planning to invest further in its existing brands, with a new Paris Hilton fragrance mooted for this fall and a Guess fragrance planned for Spring 2009. Although Katz did not give any specific figures for the year ahead, he noted that the was "optimistic about the growth and profit potential of the company in fiscal 2009 and the future."