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Tag: Global Brands Group

  • Global Brands Group posts another loss

    Global Brands Group posts another loss

    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 organization,” 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 percent 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 percent to $400 million.

    However, as we reported in November, sales fell by 4.1 percent 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 organization.

    “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”.

  • Global Brands to Sell US Licensing Businesses to Differential Brands

    Global Brands to Sell US Licensing Businesses to Differential Brands

    Global Brands Group is to sell a substantial part of its North American branded business to Differential Brands Group for US$1.38 billion.

    The move, announced at the release of its annual results yesterday, will allow it to cut debt, pay a modest special dividend to shareholders and free capital to grow “a more focused business”, the company said. It will also result in about half of its 7000 staff leaving the company.

    Global Brands Group is currently carrying about $1.1 billion of debt, much of it related to its 2014 spin-off from Li & Fung and subsequent listing.

    The assets to be transferred include licences for Disney, Star Wars, Calvin Klein, Under Armour, Tommy Hilfiger, Bebe, Joe’s, Buffalo David Bitton, Frye, Michael Kors, Cole Haan, Kenneth Cole and the BCBG Max Azria label which it bought last year for $27.4 million after the company filed for bankruptcy.

    CEO Bruce Rockowitz said the sale was the outcome of a strategic review of the business.

    “We concluded that divesting the portion of our business that has a high present-day value, was the way to move forward. With this transaction, the group will be able to improve our balance sheet significantly and simplify our organisation, while focusing on the less established lines of business where we see high growth potential going forward.”

    Subject to shareholder approval, the deal will see Global Brands Group become “simpler, flatter and more nimble”.

    The company said that on the branded product side, the group’s European and Asian businesses will remain as before, while its US business will now focus on footwear and its remaining fashion business. Brand Management will continue to be managed on a global basis.

    “Looking ahead, we will continue to attract new licenses to our portfolio with a tighter and deeper focus on our businesses,” said Rockowitz. “At the same time, we will continue to improve the efficiency of our existing businesses, delivering synergies across our platforms. In addition, we have embarked on a significant cost reduction program across the organisation and we are committed to improving our cash flow via a combination of tighter working capital management, and even stronger cost discipline.”

    Revenue up but write-downs cost

    For the year to March 31, Global Brands Group increased its revenue by 3.4 per cent to $4.023 billion.

    However sales were impacted by Coach taking its footwear business in-house after their licence expired in June last year, and the cessation of the Quiksilver kids fashion licence when the company declared bankruptcy.

    Total margin increased from 28.5 per cent to 31.2 per cent, however operating costs increased by 37.3 per cent to $1.254 billion, driven largely by transition costs for new licenses in men’s and women’s fashion and additional operation expenses for running the new brands.

    The group also made one-off, non-cash adjustments in relation to impairments from the write-off of a receivable arising from a loan made by the company, and various intangible assets, which totalled $94 million.

    “In addition, taking into account this strategic divestment, the external market condition and business performance, the group performed an impairment test and recognised a non-cash goodwill impairment of $1.05 billion during the financial year,” the company said. That resulted in a net loss of $887 million for the year, however earnings before interest, taxes, depreciation and amortisation was steady at $379 million.

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  • Global Brands Group sales among best in class

    Global Brands Group sales among best in class

    Global Brands Group sales rose 15 per cent in the second half year.

    That’s a figure CEO Bruce Rockowitz believes puts the Hong Kong brand licensee and manager second only to Under Armour in business performance in the current lacklustre global economy.

    Sales soared 49 per cent in women’s and men’s apparel, its gross margin stretching from 39.9 per cent to 41. 7 per cent.

    It’s biggest category – childrenswear – recorded a 10.3 per cent sales increase and an improvement in gross margin from 34.8 per cent to 36.3 per cent. Footwear and accessories sales rose 3.4 per cent and its brand management business, its smallest division at present, improved by 52.8 per cent. That business will benefit from a significant boost when the company launches its first Katy Perry-branded products, a footwear range, in early 2017, targeting consumers in the US and Europe.

    “We’ve had a very strong year in relation to the market,” said CEO Bruce Rockowitz at a results presentation in Hong Kong late Thursday. “We’re two years into the spin-off [from Li & Fung Group] and we’ve done a lot of heavy lifting. Our top line is exceptional compared to the market.

    The momentum we have so far is in spite of the market and in spite of the [US] election which put a lot of uncertainty out there.

    “Our revenue is up 15 per cent , driven by organic growth, and with no acquisitions.”

    Hong Kong will underperform

    Rockowitz says Asia remains a small market for the group, which is developing it with David Beckham and the Spyder brand and in the children’s sector.

    “Asia remains promising given an expanding middle class, despite China’s growth rate slowing.

    “Hong Kong is different to the rest of the world because we are tied to China and tourists from China to here. I think the Hong Kong market will still be underperforming for the rest of the [fiscal] year.”

    He said high rents were affordable when business is good – “which it is not right now”.

    Within Asia, Korea is performing strongly.

    “Korea is a place where you can develop great design and great DNA of brands.”

    Spyder is performing well there, with GBG expecting to have 100 stores trading by the end of March.

    Global Brands Group now holds licenses of varying terms but up to 30 years in its core categories. In kidswear, its brands include Disney, Calvin Klein, Tommy Hilfiger, Under Armour and Nautica. In men’s and women’s fashion Spyder, Juicy Couture, Jones New York, Joe’s Jeans, Buffalo Jeans and David Beckham. In footwear, Calvin Klein, Cole Haan, Michael Kors, Kate Spade and GBG’s own brands including Aquatalia and Frye.  It’s fast-growing brand management group formed a joint venture with Creative Artists Agency in July propelling it instantly into the world’s largest company in the space. Brands include Katy Perry, David Beckham and Jennifer Lopez.

    High hopes for Katy Perry

    Rockowitz believes securing the Katy Perry brand management will bring huge benefits to GBG, suggesting US$20 million in sales in the first year of the partnership. Perry has 100 million followers on Twitter and is revered across the northern hemisphere and Asia. The company will launch the footwear collection in February-March 2017 after revealing it to the trade last August.

    It will be distributed to leading US and European retailers initially, with Asian consumers having to buy it online or wait until two or three seasons ahead before their regional launch.

    “Neither of us want to grow too fast and get it wrong. The products are in line with Katy’s image. Retailers are excited, but consumers haven’t seen it yet.”

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  • President Trump ‘good for Asia’

    President Trump ‘good for Asia’

    Global Brands CEO Bruce Rockowitz is confident President Trump will be good for Asia’s apparel industry.

    Speaking at the release of the company’s half yearly results in Hong Kong Thursday afternoon, Rockowitz, who knows Trump personally, does not believe tariffs will be imposed on goods imported from China because it will hurt too many American businesses.

    A growing US economy would benefit Global Brands Group because it was already performing well in a weak market. “We’re not banking on it, we’re not budgeting for it.” But if the US economy improves, the company is ready to reap the rewards, he said.

    “He [Trump] is a businessman. A very smart businessman. He is pragmatic. He is a person who will put the right people around him and he will listen to them

    One thing we believe is that there is going to be an economic boom in the US because of his policies and the fact he controls both houses. Lowering the corporate tax to 15 or 16 per cent will result in a lot of new jobs in the economy.”

    With lower company taxes and more jobs, more money will be circulating in the economy. ON top of that Trump plans infrastructure planning – meaning more spending.

    “The one thing he will want to be remembered for is for a great economy.”

    If he imposed taxes on imports, giant American companies like Apple, Walmart and car makers who rely on imported components (and in Apple’s case complete products) would be adversely impacted and Trump would not want that, Rockowitz said.

    “Forty-five per cent import duties would be catastrophic, so I don’t think he will do that.

    “The election is over and we are seeing now he is being more conciliatory.”

  • Revenue up for Global Brands Group

    Revenue up for Global Brands Group

    Branded apparel, footwear, fashion accessories and lifestyle product company Global Brands Group Holding has had a US$4118 million revenue increase for its latest reporting period – covering 15 months because of a change of the financial year end date to March 31.

    Its revenue growth was partially offset by a decrease in the euro exchange rate, the tail-end impact of exiting underperforming brands, and an unseasonably warm winter in North America.

    The core operating profit and net profit for the period were $75 million and $25 million respectively, reflecting the typically weak first quarter.

    “Since Global Brands’ independent listing two years ago, our business has progressed along a steady growth trajectory,” says CEO/vice-chairman Bruce Rockowitz. “We have focused on leveraging our competitive strengths as we grow around our core segments. Today, we enjoy a unique position in our industry as no other company operates in the same space in the categories in which we specialise, at our vast scale, across so many countries and regions.”

    Its total margin has continued to trend up since 2013, reaching $1379 million, or 33.5 per cent as a percentage of revenue. As a result of the group’s investment in key controlled brands and adding new licences to the portfolio, running costs grew to $1304 million.

    “We continue to sharpen our focus on our key product categories and high-performing brands, while expanding our platforms where relevant,” says president/COO Dow Famulak. “Our kids category remains a highly successful franchise delivering consistently positive results, while our footwear and accessories business also performed well, particularly our key footwear brands.

    “We made excellent progress expanding the direct-to-consumer reach and increasing the product offering of our key controlled brands, such as Frye, Spyder and Juicy Couture. Under Seven Global, we extended the David Beckham brand to the menswear product category through a partnership with Kent & Curwen, and recently to the men’s grooming category through a partnership with the men’s skincare brand Biotherm Homme.”

    Rockowitz says the group is committed to global growth. “We will continue to expand our footprint in Europe and in Asia, as well as look for new avenues to further build upon our already strong presence in the US.”

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  • Spyder launches in Korea

    Spyder launches in Korea

    Ski and sportswear brand Spyder has launched in South Korea with an all-new product line available in freestanding stores and shop-in-shops.

    An accelerated retail rollout is planned with 25 stores opening across the country by the end of 2015.

    “We are excited to be working with Global Brands to bring Spyder to South Korea, one of the world’s most fashion-forward and trendsetting markets,” said Jamie Salter, chairman and CEO of Authentic Brands Group and owner of the brand.

    “Spyder is highly regarded and we are confident that the brand will flourish in the country.”

    Designed for the ‘style-seeking South Korean consumer’, both the men’s and women’s collections draw from the core DNA of the brand, fusing elements of performance and fashion.

    “We see tremendous equity in the Spyder brand and its ability to translate across key markets in Asia,” said Bruce Rockowitz, CEO and vice chairman, Global Brands Group.

    “We look forward to replicating the success we have achieved in other markets to South Korea, through the roll out of a number of exciting brand and category extensions.”

    Spyder is featured in shop-in-shops at fashion hot spots including Galleria Department Store, Hyundai Department Store, Lotte Department Store and AK Department Store. The brand also launches with freestanding stores in Seoul, Daegu, Gumi, Incheon and Sokcho. Spyder will be promoted in a 360 degree campaign that includes national Print, Out of Home, Digital, Social, and TV promotion beginning this month.

    Spyder is described as one of the world’s most recognisable and credible outdoor sportswear brands, focused on enhancing the ski experience both on and off the mountain. Originally founded by David Jacobs, coach of the Canadian Ski Team and Bob Beattie, coach of the United States Ski team, Spyder’s roots run deep in the ski community. The brand has been the official sponsor of the US Ski team since 1989. Spyder offers technical ski, fitness, and lifestyle apparel and accessories for men, women, and children. The highly sought after brand is available in department stores, sporting goods stores, and specialty retailers throughout North America, Europe, the Middle East and now South Korea.

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