Pacific Brands in talks to sell unprofitable footwear operations
Pacific Brands, the Australian clothing and linen company, is in talks with an undisclosed buyer to sell its unprofitable footwear and sporting goods business.
Responding to media reports, the Melbourne-based business confirmed it was in negotiations to sell its brands collective unit, which includes the Clarks, Hush Puppies, Volley, Superdry and Everlast brands, although no agreement had been reached. The unit reported a loss of A$900,000 on an earnings before interest and tax basis as sales fell 7.9 percent to A$204 million in the year ended June 30.
The sale comes after Pacific Brands announced the sale of its workwear unit, which owns the Hard Yakka and King Gee clothing brands, to Wesfarmers after impairments against the business resulted in a full-year loss.
Pacific Brands, which also owns the Sheridan linen brand as well as Bonds underwear, reported an annual loss of A$244 million, from a profit of A$73.8 million a year earlier. The loss was largely due to a non-cash impairments of goodwill and brand names at the workwear business of A$241.7 million. Sales in the year rose 3.8 percent to A$1.32 billion.
Excluding impairments, Pacific Brands' profit fell 28 percent to A$53 million in the latest year. Australia makes up 88 percent of sales and New Zealand is the second-largest contributor at 7.3 percent.
Shares of ASX-listed Pacific Brands rose 0.5 percent to 48.75 Australian cents, and have declined 24 percent this year. It was unchanged at 51 cents on the NZX, and has declined 27 percent since the start of the year.