Shifts in Fashion Affect GBG Revenues

NORTH AMERICA–Following shifts in the company’s retail buying agenda, the anticipated termination of the Quiksilver fashion license and Coach taking its footwear business in-house, Global Brands Group reported that revenue decreased 3.2 percent to $1.785 billion for the six months ended Sept. 30.

April 6, 2018

Shifts in Fashion Affect GBG Revenues

Although the company saw overall declines, its brand management business saw revenues jump 53.9 percent to $101 million due to new clients and overall expansion.


Meanwhile, Global Brands’ total margin continued its upward trajectory, increasing from 28.3 percent to 30.5 percent as a percentage of revenue, primarily due to sourcing optimization. The company’s operating costs, which is net of other gains and the gain on disposal of interest in an associate, decreased 3.5 percent, primarily due to the gains related to the sale of Frye’s IP, which was partially offset by higher operating costs due to new licenses and higher direct-to-consumer distribution.

For the company’s kids’ business, revenue decreased by 6.3 percent to $762 million, which is due to the anticipated cessation of the Quiksilver license agreement as a result of the company’s bankruptcy. The

company’s shift to retail buying later in the year also had an impact.

The men’s and women’s fashion division increased revenues by 25.1 percent to $464 million, which was partly due to the addition of new licenses such as the BCBG Brands and Bebe.

Meanwhile, Global Brands’ footwear and accessories business decreased 22.9 percent to $458 million, which was primarily due to the ending of the Coach footwear license in June.

Finally, the brand management business saw revenues increase 53.9 percent to $101 million as a result of continuous expansion and the addition of new clients.

“This is the first year of our second three-year plan. As in the past, the first year is always an investment year and we concentrate on investing in our core business and upholding our position as a licensing partner of choice,” says Bruce Rockowitz, chief executive officer and vice chairman, Global brands Group. “We will continue to put resources into areas such as e-commerce, where we can drive significant value both in our own direct-to-consumer offering and our relationships with leading platforms. In addition, we will continue to invest in our operations to drive efficiency and fully leverage the scale of our businesses.” 

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