Global Brands turns corner with third quarter profit of US$113m
Li & Fung spin-off posts US$113m profit in third quarter, sending shares 3.75pc higher
Global Brands Group, the consumer brands business that spun off from Li & Fung in July, turned the corner in the third quarter to post a profit of US$113 million, following a half-yearly loss due to heavy seasonality of the business and one-off listing expenses.
Shares of the firm rose immediately after the announcement yesterday morning to a high of HK$1.70 before closing up 3.75 per cent at HK$1.66. In comparison, the benchmark Hang Seng Index fell 0.10 per cent.
The company said yesterday that profit for the first nine months amounted to US$50 million as strong earnings in the third quarter offset the US$63 million loss in the first half.
"This is in line with previous announcements that seasonality skews significantly towards the second half of the year," company chairman William Fung Kwok-lun said.
Fall and winter apparel are typically more expensive and thus result in higher margins for fashion-related businesses. Global Brands holds the licences for Disney characters and lifestyle brands such as Juicy Couture, Frye, Jennifer Lopez, Sean John, mostly focusing on the American "masstige" sector - the space between prestige and mass-market brands.
The business was also affected by one-off expenses of US$31 million associated with the listing in the first half.
