Lower licensee sales due to the pandemic, and the non-renewal of certain Cherokee brand licensing deals, weighed on the revenues of Apex Global Brands, previously called Cherokee Global Brands. Sales for the parent company of Hi-Tec, Magnum, and Tony Hawk dropped by 17 percent to $4.1 million for its third fiscal quarter ended on Oct. 30. E-commerce remained a bright spot.

Despite lower revenues, the company’s adjusted Ebitda increased to $1.8 million, from $1.7 million last year. It also managed to narrow its net loss to $6.0 million, versus $6.8 million for the year-ago quarter, thanks to cost-saving measures, which resulted in a 28 percent decrease in SG&A expenses. The company said it is also achieving increased efficiency due to the introduction of newer technologies, such as 3D product development and virtual brand showrooms, which make remote working more effective.

In addition, through the CARES Act, Apex received an income tax benefit of $9.4 million over the first nine months of the fiscal year, which also contributed to the lower loss.

Nevertheless, the situation remains tricky for Apex, which had its senior secured term loans forbearance extended on its $45 million of senior debt through Dec. 31, 2020. However, its lender agreed to extend forbearance through Mar. 31 in exchange for $2.5 million in additional fees, and Apex said it is evaluating strategic alternatives for the company.

The management has not provided any guidance for the full year due to the uncertainty surrounding the pandemic. It said that while it continues to seek new licensees for its portfolio of lifestyle brands - it recently signed several new licensing and distribution contracts for Hi-Tec with partners in Europe, North America and Asia - it may become increasingly difficult to obtain license renewals or new licensees going forward, an issue that would put significant pressure on the group’s business model.