Home / Knowledge / News / Apparel/Garments / Hampshire Group CEO provides outlook for 2014
Hampshire Group CEO provides outlook for 2014
21
Dec '13
Hampshire Group, Limited issued a letter to shareholders from its chief executive officer.

2013 Disappointments

Our biggest operating disappointment stemmed from a challenging climate facing our largest retail customers. Several retail customers of both our Hampshire Brands and Rio Garment divisions reduced purchases resulting from their own sales declines and strategic changes. We suffered a major shortfall, representing 10% of company sales, in our private-label t-shirt business within Rio Garment. Additionally, the Hampshire Brands division forecast strong growth outside of our core product in both private label sales and licensed product sales which did not materialize.

These sales at Hampshire Brands were expected to account for 20% of the company’s 2013 planned revenue. The company entered 2013 with a cost structure in the Brands division to support this growth and was only able to begin reducing the corresponding fixed costs during the summer when it became apparent these sales were not going to materialize. Given the operating leverage inherent in our fixed-cost business model, sales declines pressured gross margins and selling, general and administrative (SG&A) expenses and stifled our ability to return to positive cash flow and profitability.

Beyond our external shortfalls in 2013, we worsened our own cause via inexcusable operating mistakes at our Rio Garment manufacturing plant in Honduras. These production and logistics mishaps should not have occurred. We have changed management and oversight to ensure that this does not reoccur. These mishaps accounted for $1 million of unanticipated costs in 2013 which will not reoccur in 2014.

Finally, as previously disclosed, we were disappointed to lose most of our valuable net operating losses (tax shields) stemming from the prior board and senior management's decisions relating to the tax consequences of stock trading after the August 2011 Rio Garment acquisition.

2013 Achievements

Although 2013 had many disappointments, Hampshire Group made major strides toward achieving operating profitability and positive cash flow which will become more evident in the 2014 financial results and beyond. Throughout 2013, management focused on re-balancing the product portfolio, improving sourcing and manufacturing in Hampshire Brands, as well as addressing and improving non-productive assets. The resulting operating platform can manage both a larger volume of sales at our two divisions as well as a larger portfolio of brands.

Mid-year, we divested Scott James, a men’s label that never achieved sufficient scale to reach profitability. The sale ended our company's recurring losses with the brand. As part of this transaction, we retained rights to certain aspects of the brand and may seek to develop those areas in the future. 2013’s results include approximately $2M of losses from Scott James.

Our greatest operating achievement in 2013 was the successful introduction of our Dockers Men's shirts and sweaters along with the overhaul of our contract-manufacturing and sourcing for our Dockers license. Dockers has achieved widespread acclaim at retail, with public recognition from Levi Strauss & Co., the brand's owner, as well as with major store operators selling the brand.


Must ReadView All

Textiles | On 22nd Jul 2017

Govt constitutes GST Feedback and Action Room

The Government of India has constituted a Feedback and Action Room...

Textiles | On 22nd Jul 2017

India’s cotton textile exports fell in FY17: Tamta

The overall export of cotton textiles from India declined in 2016-17...

Textiles | On 22nd Jul 2017

Stella McCartney, Bolt Threads partner for eco fashion

Fashion designer Stella McCartney has partnered with Bolt Threads for ...

Interviews View All

Sunil Rathore
Lacoste India

‘New vendor is welcome if he offers cost, quality and timely delivery’

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

C. Dhandayuthapani
Mag Solvics Pvt. Ltd

ITME 2016 exploited our full strength like never before

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X