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FRUIT OF THE LOOM’S LOSSES CONTINUE TO RISE

first_imgIt was once one of the biggest employers in Co Donegal.Fruit of the Loom were once a major employer in DonegalBut it has now been revealed that not event the phased transfer of Fruit of the Loom’s Irish operation to its lower cost Morocco base has not ended the firm’s problems.New figures show that losses at the Fruit of the Loom International Ltd increased more than 12 fold last year to €31.6m. Fruit of the Loom is owned by Warren Buffett’s conglomerate, Berkshire Hathaway.At its peak, the US-owned clothing manufacturer employed 3,500 people in six Irish plants including Raphoe and Buncrana.However, in 2004 the company announced that it would shut its remaining two factories with the loss of 650 jobs in Donegal and Derry before the end of 2009.The company today retains a small operation at Buncrana and the directors’ report shows that the firm made the loss in spite of revenues climbing by just under 10% from €204m to €224m in the 12 months to the end of December last. The loss of €31.6m last year follows losses of €2.5m in 2011.According to the directors’ report “2012 proved to be an exceptionally difficult trading year for the European group. With our inventories loaded with prior year inflated cotton costs, together with a continuing abnormal cotton price level and the inability to push through into the market place via higher selling prices, meant the bulk was absorbed through the profit and loss as a cost”.The directors add: “This is in addition to the need to reduce price year on year to attempt to capture whatever demand was available within a very depressed market place, created a very unstable gross margin position which was impacted significantly.”The Irish Examiner reports that year-on-year volumes came in higher by 25%, with revenues up 10%, but gross margin was down by 132% at a loss of €7.5m.Selling, distribution and administration costs were down just over €2m, resulting in a significant loss of €31.7m. On the firm’s future developments, the directors state “the European business continues to face a very uncertain market place.”The directors add that “various initiatives are under way to ensure the future success of the European group”.The losses last year resulted in the firm having accumulated losses of €203.1m at the end of December last. The firm’s shareholder deficit totalled €98m.The accounts show that the firm’s parent, Fruit of the Loom, has advanced €262m to the firm. The figures show that the Irish-based entity employs 27 with staff costs last year totalling €3.1m.FRUIT OF THE LOOM’S LOSSES CONTINUE TO RISE was last modified: September 24th, 2013 by StephenShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window)last_img read more