12 Aug Global Brands’ Pruning Trims First Half Sales
Global Brands Group Holding Limited, which owns long-term rights to the Sypder snow sports brand, reported sales declined 5 percent to $1.28 billion for the six months ended June 30 largely due to pruning of under performing brands and continued weakness in Europe related to the Euro exchange rate.
Excluding the impact of these factors, sales for the Group grew by approximately 6 percent during the same period.
“This summer Global Brands marked its first anniversary as an independent listed company,” said Bruce Rockowitz, Chief Executive Officer and Vice Chairman of Global Brands Group Holding Limited. “We continue to build on the solid foundation we have established as the partner of choice for American power brands in the affordable luxury space.”
He added, “We have sharpened our organizational focus around our product categories, as we continue to improve our business mix towards higher margin areas while at the same time driving operational synergies across the organization. Today, we have a strong portfolio of brands and an excellent platform to take them global through either licensing, ownership or brand management. In line with previous years, we expect our turnover and profits will accelerate significantly in the second half of 2015, particularly given the skewing effect of seasonality on our business.”
Business at Global Brands, which was spun off by Li & Fung last year, continues to be skewed towards the second half of the year due to back-to-school sales and a higher concentration of holidays during this period, and the fact that some of the brands, such as Frye and Spyder, together with product categories like winter accessories, are more skewed towards the fall and winter seasons.
Total margin continued to trend up, growing as a percentage of sales from 29.7 percent in the first half of 2014 to 31.7 percent in the first half of 2015, mainly due to the Group’s focus on improving the business mix towards higher margin areas such as characters on the Licensed Brands side and key Controlled Brands.
As the Group continued to drive operational synergies, operating costs declined by 3.2 percent to $449 million. As such, all profit lines of Global Brands recorded significant improvement in the first half of 2015 as compared to the same period last year. Core operating loss improved by 32.5 percent to $43 million, while the net loss attributable to shareholders improved by 64.5 percent to $35 million in the first half of 2015 from $98 million in the first half of 2014. The Group’s adjusted net loss attributable to shareholders also improved by 24.3 percent to $40 million in the first half of 2015 as compared to $53 million for the same period in 2014.
Group EBITDA increased by 39.6 percent to $47 million in the first half of 2015 from $34 million for the same period in 2014.
“We continue to invest in and strengthen our business,” said Dow Famulak, President and Chief Operating Officer of Global Brands Group Holding Limited. “Within Licensed Brands, the characters and kids fashion areas continued to perform well. This strong performance comes as we leverage our unrivalled global platform and our position as one of the largest licensees of all major kids entertainment franchises. On the Controlled Brands side, we have added Jones New York to further strengthen our women’s fashion and apparel brands portfolio. We also continue to grow our key Controlled Brands, such as Frye, Spyder and Juicy Couture and have bolstered our management teams across several brands.”
Rockowitz added, “Consumer appetite for leading American affordable luxury brands remains strong, especially as consumers’ demand for these brands has been fuelled by the widespread access to the online arena that makes these brands more popular than ever globally. Looking ahead, we expect our leading businesses to continue to perform well and maintain the course of their growth trajectory. At the same time, we will continue to increase our geographic footprint and look for strategic opportunities to add to our existing platforms, through both licenses and acquisitions.
Global Brands Group Holding Limited is one of the world’s leading branded apparel, footwear, fashion accessories and related lifestyle product companies. The Group designs, develops, markets and sells products under a diverse array of controlled and licensed brands and a wide range of product categories.