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Company profits fall due to transfer of operations to Morocco
30
Oct '10
The expenditure on the phased transfer of the company's operations to Morocco had affected the pretax earnings of Fruit of the Loom by about 30 percent during last year.

The fall in the company's profit has been disclosed in the accounts filed for the textile company based in Donegal, which is owned by the Warren Buffet, the US billionaire. According to the accounts filed, the profits of the company dropped down by 28 percent to €30.4 million and the revenue declined by 12 percent to €127 million.

2009 had been very challenging for the company and it had experienced the unfavorable trading situation which had been continuing since the end of 2008.

Fruit of the Loom had given employment to 3,500 people in Ireland, when it had been in its peak. The company had announced that it would close down its two factories in 2004. Around 650 people lost their employment before 2009. This had taken place as a result of the shifting of the company's spinning, knitting and dyeing operations to Morocco, where the labor costs are much cheaper than that in Ireland.

The company's registered address continues to remain at Lisfannon Business Centre, Buncrana, where the main function is sourcing for the sale of finished products.

The company's demand has been very poor and the distributors are clearing their stocks aggressively. The expenditure on promotional activities has been stopped for the time being.

Fibre2fashion News Desk-India

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