Orange 21, the parent company of Spy Optic and LEM, posted a net loss of $777,986 in the 3rd quarter ended Sept. 30, as compared to a net profit of $192,110. The company had an operating loss of $869,172 during the period, and the gross margin shrunk by 240 basis points to 48.5 percent. Sales rose by 5 percent to $11.4 million, but excluding LEM, acquired at the beginning of 2006, turnover fell by roughly 5 percent. The American company has temporarily stopped giving public guidance. It is putting together a series of initiatives to refocus its product mix, reduce cost and improve execution. Specifically, Orange 21 plans to eliminate a large amount of unprofitable SKUs, while increasing production of core styles for Spring 2007. The company is also reviewing its foreign operations and its overall cost structure to reduce overhead, and this could result in the company pulling out of unproductive activities and regions.