Bagir results show ‘tremendous’ turnaround
2016 was a significant year for clothing maker Bagir Group, which delivered a turnaround trading performance after reversing losses racked up in the previous years.
The Israel-based company specializes in developing, manufacturing and marketing high quality men and women’s tailored clothes.
It said EBITDA increased to $1.6m in the 12 months to 31 December, rising from an EBITDA loss of $4.3m in the previous year and demonstrating the successful execution of the recovery plan.
This, despite a drop in revenue to $64.1m from $75.2m, which it said was expected due to the reduction in sales from M&S and a shift to sales net of fabric to a US customer. Bagir said the revenue performance was in line with expectations in the US, the UK and other markets (including Europe, South Africa and Australia).
Gross margin increased strongly to 16.4% from 11.6% driven by a mix of cost efficiencies and higher margin sales.
“For 2016, our target was to reverse the losses recorded in the previous year, strengthen our balance sheet, reduce costs and re-focus manufacturing on three tax and labour efficient sites. We have done this successfully and I believe we are now a stronger business than we were three years ago having been through such a rigorous process,” said CEO Eran Itzhak.
During the year, the company signed new contracts with H&M and Haggar Clothing Co. in Ethiopia and recruited new customers in both the US and the EU. Further orders have been secured in France in 2017 from “one of the country’s leading retailers” and “promising discussions” are being held with a number of well-known international retailers for new orders.
Bagir has been in operation since 1961 and suffered a sharp deterioration in 2014 after losing a customer on which it was heavily reliant.
The AIM-listed company provides formalwear tailoring for renowned department stores and premium private label brands across the world, including Austin Reed, AR RED and Jay Godfrey.
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