Global Brands revenue increases 3.4% in FY18

The group sells branded products under its kids, men’s and women’s fashion, footwear and accessories verticals. Operating primarily as a wholesale business, the products are sold across multiple geographies and through various distribution channels, including department stores, hypermarkets/clubs, off-price retailers, independent chains, specialty retailers and e-commerce.

Revenue for the kids vertical decreased by 5.5 per cent to $1,514 million year-on-year, while total margin decreased by 4.3 per cent to $396 million. With further impact of one-time losses/gains and impairment of goodwill, during the reporting period, kids vertical recorded an operating loss of $524 million.

During the fiscal 2018, revenue from men’s and women’s fashion increased by 39.4 per cent to $1,143 million as compared to last year, while total margin increased by 56.9 per cent to $484 million. The increase was primarily attributable to the addition of new licenses. Operating costs increased by 84.0 per cent to $464 million as a result of the addition of new licenses and significant strategic investments in direct-to-consumer channels for key brands.

"Through the 12 months ended March 31, 2018 (the 'reporting period'), the group continued to grow our topline while total margin progressed on a positive trajectory, in line with our expectations. However, the reporting period has also been one of significant challenge amidst an evolving industry landscape. Our sales volume was also affected, as anticipated, and as discussed in our interim results announcement," Bruce Rockowitz, chief executive officer & vice chairman.

In the fiscal 2018, well-known brands such as Calvin Klein and Katy Perry continued to have a strong appeal to consumers, driven by our contemporary designs and fashion-oriented approach, which sustained their performance. In addition, we continued to leverage the group’s brand portfolio and expertise across multiple categories and our global platform to expand our businesses.

"Looking ahead, we will continue to invest in our brands as an operator and partner to brand owners, especially our long-term licensed brands, to sustain their competitiveness in the constantly changing marketplace. While the strategic divestment discussed above will substantially reduce our brick and mortar locations, our highly selective investments in direct-to-consumer channels will inevitably attribute to higher operating costs in the short term. We believe men’s and women’s fashion will continue to be a fast-growth business for the Group and deliver attractive margin profiles in the long run," concluded Rockowitz. (RR)

Fibre2Fashion News Desk – India