Global Brands Group posts 15pc increase in interim revenues

Margins jump 19.9pc, while operating costs increase 12.6pc, largely from investments in men’s and women’s fashion brands, two years after spinning off from Li & Fung

PUBLISHED : Thursday, 17 November, 2016, 10:19pm
UPDATED : Thursday, 17 November, 2016, 10:19pm

Global Brands Group, the branded apparel company, has reported a 15 per cent increase in half-year revenue driven by growth in existing and newly licensed brands, two years after being spun-off from supply-chain retail manager, Li & Fung.

The company, which licenses brands such as Juicy Couture, Frye, and Kate Spade, saw revenue rise to US$1.84 billion in the six months ending September 30, despite a “weak market”, said Bruce Rockowitz, the company’s chief executive officer and vice chairman, on Thursday.

“We have had a very good year relative to the market. We’ve done a lot of hard lifting in the business and things are going very well.”

Net profit fell from US$21 million to US$7 million, which Rockowitz attributed to additional assets being transferred to its former owners. The adjusted net profit for shareholders rose to US$44 million from US$10 million last year.

Total margins jumped 19.9 per cent, while operating costs increased 12.6 per cent, largely from investments in men’s and women’s fashion brands.

The company has grown “in spite of the market” and uncertainty from the US presidential election, Rockowitz said, adding he believes the new administration will be an “economic boon” for the US, leading to lower corporate taxes, greater infrastructure spending, and greater jobs and economic growth.

“I don’t forsee much negativity for our business. In fact, I actually think it’s quite positive,” he said.

While Trump has pledged to raise trade tariffs against China from 4.2 per cent to 45 per cent, Rockowitz believes this is unlikely to be carried out, while accepting it would be “catastrophic” for business.

If additional tariffs are levied, however, Global Brands has alternative places to produce from outside of China, he said.

While the company currently has a smaller Asia presence, it is developing its regional footprint through partnerships with ex-England footballer David Beckham, Spyder, and local e-commerce platforms.

It is focusing on kids brands in China, following the removal of China’s one-child policy late last year, and expanding its presence in South Korea.

The company also recently formed a joint venture with pop star Katy Perry, to develop her footwear collection.