Global Brands Group, the branded apparel entity spun off from sourcing firm Li & Fung last July, on Thursday reported positive profit growth for the second half of 2014.
Since it’s listing as an independent company, core operating profit increased 36.6% to $217 million for the six months ended Dec. 31, 2014. Total margin percentage increased to 34 percent and turnover grew 7.5% to $2.1 billion.
Profit attributable to shareholders increased by 24.9% to $202 million, while EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 21.5% to $306 million compared to the prior year period.
The company attributes the positive performance to growth in turnover, an improving business mix in favor of higher-margin business and exiting underperforming businesses, and Bruce Rockowitz, Global Brands Group CEO and vice chairman said, “This is evidence of the tremendous growth potential unlocked by the spin-off.”
Brands the Group does business with include Under Armour, Nautica, New Balance and Paul Frank, and the company just entered a licensing agreement with Kate Spade in January to produce Kate Spade New York cold weather accessories, including fashion hats, woven scarves, leather gloves and belts.
Considering the first half of 2014, when Global Brands was still part of Li & Fung, the Group reported turnover of $3.45 billion for the full year ended Dec. 31, a 5 percent increase over the previous year. Core operating profit for the year was up 15.2% to $154 million and total margin percentage rose to 32.3% from 30.7% in 2013. EBITDA grew 14.7% over last year to $339 million.
“We entered into major licensing agreements, and have made significant progress in growing the overall Licensed Brands business with a sharpened focus on core categories, such as kids fashion, characters, footwear and accessories. In addition, our Controlled Brands continued to perform well over the past year, accounting for an increasing percentage of contribution. The brands Frye, Spyder and Juicy Couture in particular have posted strong results, while Aquatalia, although smaller in scale, has proven its brand appeal as we expand its product range,” Global Brands Group president Dow Famulak said.
“Global Brands is in a positive place today; we are focused and streamlined, and we see an increasing appetite for affordable luxury, the sector in which we primarily operate,” Rockowitz added. “Going forward, we intend to strengthen our business in the U.S. At the same time, we will continue to focus on accelerating growth by taking our American power brands global and replicating our success in North America across Europe and Asia. Despite a complex macroeconomic environment, we are confident on continued growth momentum in 2015 and beyond.”