Bagir says first-half sales fall on softer UK demand
AIM-listed clothing maker Bagir Group saw revenue decrease 16% during the first six months to 30 June, blaming a reduction in order volumes in the UK.
The company licenses menswear brands such as Austin Reeds, AR RED and Jay Godfrey.
It said revenue for the six-month period declined to $28.1m from $33.5m due to softer demand in the UK market, driven by the company’s “refusal to manufacture at non-profitable price levels.”
However, it said it secured important new clients and orders from customers in France, South Africa and Australia during the period, and increased EBITDA to $1.9m compared to $0.8 in the first half of 2016.
The results follow a bright 2016 for Bagir, during which the company repaid the bank debt, reduced its annual costs and continued implementing its turnaround plan.
The strategy continued into the new half year with the acquisition of a manufacturing site in Ethiopia, which is expected to produce 3,000 pairs of trousers per day by mid-2018. Bagir said the site will expand the group’s manufacturing capabilities, acting as a catalyst to win high volume sales orders.
"These results show the group's continued progress towards establishing a core manufacturing base in Ethiopia coupled with the sites in Vietnam and Egypt that enables the company to compete effectively for business from the world's leading retailers. The acquisition of 100% ownership of our Ethiopian site was an important step towards achieving this aim," said Chief Executive Officer Eran Itzhak.
“We continue to deliver on our reputation as an innovative tailor, building upon our 50 year heritage servicing major high-profile retailers with April’s release of six new concepts already securing orders from high-street brands in the UK and Europe. Sales levels have been slightly slower than forecast but the medium term prospects coupled with increased capacity in Ethiopia remain very exciting.”
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