About 32% of companies in the sector have dropped their profit in the last fiscal year, according to the Global Fashion Drivers 2019 report.
Fashion renegotiates with its creditors. In 2018, about 19% of the fashion industry giants refinanced its debt, and four out of ten companies have started a cost reduction plan, according to the Global Fashion Drivers 2019 report, by Mds and sponsored by Everis.
In a context of constant sales seasons, political uncertainty and digital transformation, profitability of companies has been affected in the last fiscal year. Of the hundred companies analyzed, about 32% reduced their profit in the last year.
Also, last year was marked by the drop in sales and the reduction in margins, which prompted the large groups in the sector to refinance their debt. Mothercare, Kiko Milano, Orchestra or Debenhams are some of the companies that refinanced their debts to return to profitability.
Mothercare, Kiko Milano or Debenhams are some of the companies that refinanced their debt last year
Orchestra, for example, reached an agreement with French financial institutions to extend the term of most of its credits, which amounts 231.2 million dollars, between July 2020 and July 2021.
Kiko Milano, meanwhile, began its fiscal year by considering a 165.8 million dollars investment with the aim of delaying the repayment of its loans to banks such as BNP Paribas, UniCredit and Banca Generali.
El Corte Inglés and Spanish Mango have been two of the groups that have also opted for this measure during 2018 to breath and achieve greater profitability. In the case of the department store group, El Corte Inglés launched a refinancing plan in early 2018 with the aim of deferring the payment of 3,650 million euros.
Mango, on the other hand, signed an agreement with the main Spanish banks, Santander, BBVA, CaixaBank and Sabadell, to postpone its debt of five hundred million euros to four years, until 2023.