How much lower can Phoenix Footwear (PXG) go?

Phoenix Footwear Group, Inc. (AMEX:PXG) is down 13% today to $1.22 a share. The guys behind SoftWalk, Trotters, HS Trask, Chambers and Tommy Bahama Footwear have watched their share price fall 68% in the last year.  Is there any hope?

We haven't heard much from Phoenix besides last month's news of the company entering into a new $17 million revolving creditfacility with Wells Fargo Bank.

The facility replaces the Company's previous facility with Manufacturersand Traders Trust Company which has been retired. The new facility, which isexpandable to $20 million with the consent of the lender, has $8.3 million inborrowings, net of cash, outstanding as of June 16, 2008.

PXG's last earnings call was a mixed bag. First quarter ended March 29, it had a net loss of $280,000, or 3 cents a diluted share, compared with net earnings of $414,000, or a loss of 12 cents, during the same period last year.

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“In spite of a difficult economic environment, we remain optimistic about our future,” said CEO Cathy Taylor in a statement. “We have exciting developments under way, including the expansion of our Tommy Bahama product offering to take advantage of their Relax label, a new product line of H.S. Trask and a new extension of our Trotters label, The Z Collection."

Thanks to a strong performance from the Tommy Bahama and SoftWalk brands, net sales increased to $22 million compared with $21.3 million last year.

Taylor added the company doesn’t expect to turn a profit in the second quarter, but sees the potential for growth among its portfolio of brands during the quarter.

For fiscal 2008, the company is anticipating income from continuing operations to fall between $2 million to $2.5 million on net sales of $95 million to $100 million.

Fellow Masters, there aren't any near term catalysts going to bounce Phoenix Footwear's stock.

Maybe someone might buy them, but at this rate, you can just sit tight at pick up the company for under $1 a share.

Investing in PXG is almost like playing a Penny Stock where the daily average volume is only 1,000 shares traded with a $10 million market cap.

A few insiders of Phoenix have been picking up shares, but until Phoenix Footwear gives investors a reason to buy, its hard to risk your money during a Bear Market unless there is a clear reason to buy.

Disclaimer: The Author has no positions in the securities mentioned in this publication