Lingerie-maker's slip showing
Finance problems at Lingerie-maker Top Form International were blamed on strategic error yesterday, after the company warned it would make substantial provisions against its interim profit.
On Thursday, the company requested that its shares, which had fallen from 63 cents earlier this month to 50 cents, be suspended until provisions for the interim results to December, due to be released on Monday, were structured.
A source said Top Form's problem may date back to June last year when it launched a department store business in Shanghai. 'This step was a wrong move,' the source said.
He said Top Form's move into retailing 31/2 years ago had also proved unsound.
Bankers to the group are believed to have advised management against straying from its core business of manufacturing and exporting lingerie.
'This business is still quite good and brings in steady income,' the source said.
The Shanghai store was launched under the name Printemps after the French retailer, France Printemps, which financed the project.
The opening of the store was behind schedule and affected the group's cash flow.
This business was used as security for a medium-term loan of about $104 million.
As shown in the last annual report, total bank and other borrowings surged more than 56 per cent to $601.53 million in 1995, from $383.67 million in 1994.
Top Form's profits have been in continual decline for the past 18 months - one of the main reasons being high rentals.
Top Form is to hold a board meeting on Monday to approve the restructuring of its finances and trading in its shares is expected to resume on Tuesday.
