Trimmed-down Global Brands Group has reported another loss, but says its restructuring is on track to be completed next year.
“Global Brands has entered into a new chapter as a nimble and more focused organisation,” said CEO Rick Darling. “The changes we are implementing have put Global Brands in a strong position. We are already beginning to see the benefits, with the results in the second half of the fiscal year significantly improved from the first half.”
For the year to March 31, revenue from continuing operations fell by 4.6 per cent year on year, which the company said was primarily due to eliminating unprofitable businesses. While net loss of the continuing operations increased to US$250 million, net loss attributable to shareholders improved by 55.7 per cent to $400 million.
However, as we reported in November, sales fell by 4.1 per cent in the first half year to $699 million, largely due to lower revenue in Mainland China and the disposal of the homewares business. That figure excluded any impact from the $1.2 billion sale of the North American business which led to an extraordinary dividend of around $305 million in cash and scrip last April, as well as reducing debt.
Since the restructure, Global Brands Group is now concentrated on core businesses of men’s and women’s fashion apparel, footwear and brand management.
Darling said the company remains focused on flattening its structure and building a more responsive organisation.
“We are now making significant strides towards achieving our target of reducing $100 million in operating expenses and are well on our way to exceeding this initial target. Our goal is to complete the restructuring program by the end of the 2020 fiscal year.”
The program involves a number of initiatives, including simplifying processes from design to product development to sourcing, and moving those functions offshore, “closer to the needlepoint, where production is located”.