Global Brands Group posts massive US$598 million loss
Global Brands Group has reported a net loss attributable to shareholders of US$598 million in the year to March.
That followed a loss of $400 million the prior year, but the company claims its restructuring programme involving axing brands and stores is paying off, citing a pre-tax profit of $151 million for the year.
Group sales fell 28.5 per cent to $US1.082 billion, but the company cut $209 million in operating costs
Last year, Global Brands ditched a raft of brands in the US, including Copper Fit, Kenneth Cole, Juicy Couture, Jones New York, BCBG, Goats and Taryn Rose and also shuttered brick-and-mortar stores there.
But it noted “exciting progress” of new and emerging brands including B New York, Magna Ready, which produces clothes for people with disabilities, and sports & swimwear labels Saga (pictured above) and Dakine.
“During the reporting period, we have experienced one of our most rewarding and yet, one of our most challenging years,” said CEO Rick Darling. “Throughout fiscal year 2020, we have diligently focused on executing our restructuring program, and this dedication has resulted in strengthening our balance sheet and in improving our performance despite the unprecedented impact of Covid-19.”
The brand shake-up, reduced low-margin sales and negotiation of new supply agreements helped boost the company’s gross margin by more than 640 base points from 30.2 per cent last year to 36.6 per cent this year. Another factor in the improved margin was a focus on expanding its direct-to-consumer business model.
Darling said the rapid spread of Covid-19 in February and March negatively impacted the group’s sales during the last quarter. But he believes the restructuring process the company has been through during the last two years has equipped the company to face the ongoing challenges of the pandemic, leaving it “well-positioned for growth going forward”.