Friven & Co. says it recorded a smaller net loss of $1.1 million for the six months ended 30 June 2010 (1H2010), compared to a net loss of $1.9 million in the previous corresponding period ended 30 June 2009 (1H2009), largely due to the group’s cost optimisation efforts.

Friven distributes soft furnishings and accessories for bed, bath, and home as well as children’s apparel and accessories.

Selling and distribution expenses fell 27% due to lower staff and operating leases from the closure of non-profitable stores. The closures also led to decreases in advertising & promotion expenses and logistics expenses by $0.1 million and $0.2 million respectively.

The cost optimisation exercise also resulted in the reduction of general and administrative expenses by 36% as compared to 1H2009. Furthermore, a one-off fixed assets impairment charge of S$0.2 million recorded in 1H2009 was absent in 1H2010.

The decrease of $0.1 million in depreciation for 1H2010 was due to lower depreciation for the renovation of its concept stores as the group had fewer of those in1H2010 compared to 1H2009.

All in all, for 1H2010, group revenue decreased 23%, to $30.4 million from $39.5 million recorded in 1H2009. Friven says the decrease in sales was the result of intense market competition.

This was mostly felt in the Sourcing & Procurement division where the decrease in sales from 1H2009 made up the bulk of the overall decrease of group revenue.

Consequently, gross profit for the period decreased 33% to $4.3 million from $6.4 million in 1H2009 and gross margin dipped from 16.3% in 1H2009 to 14.3% in 1H2010 also due to fierce competition which led to a downward pressure on selling prices.