(Filed Under Financial and General Interest News). iFabric’s abrupt exit from the sleepwear business was the leading cause of a 60% drop in sales at its intimate apparel division, during the quarter ended March 31.
The company announced in mid 2018 it was not extending its Maidenform sleepwear license, a business it had entered a few years earlier, and that decision has impacted overall sales and profits ever since.
Despite a 36% rise in sales at its intelligent fabrics division, the Toronto-based iFabric, as a whole, posted a loss of $395,593 in Canadian dollars (about $295,000 at current exchange rates) on sales of $2,503,793CAD (about $1.87 million) compared to a profit of $535,314CAD on sales of $4,201,249CAD during the same period last year.
Referring to the intimate apparel division, CEO Hylton Karon declared, “launch of new products in the summer of 2019 in the core bra and accessories business, coupled with a packaging refresh, gives us confidence that this area of the business will resume being a profit contributor in the future.”
He added, “necessary steps have been taken to finalize the impact on areas of business we are no longer active in. In addition, there were significant one off expenditures that impacted the earnings and cash flow of the corporation this quarter. This included a successful defense of a patent infringement allegation against our best-selling bra.” The company launched with an adhesive bra over 25 years ago, and expanded with its Coconut Grove Intimates division to include over 50 solution bras and bra accessories.
Karon focused at length on the opportunities in the intelligent fabric side of the business. “Following the first full year sales cycle of initial performance apparel programs at a major Canadian retailer, which exceeded budgeted sales by a wide margin, these programs have been renewed for 2019/20. Our unique blending of technologies with our apparel manufacturing knowledge has excited an ever increasing range of customers. Both retailers and brands have increased their development requests. We believe this unique strategy will give rise to impressive growth in the years to come.”
“Clinical trials in respect of a combination of our Protx2 antimicrobial and RepelTX durable water repellent are being scheduled for late summer 2019, at one and potentially two major healthcare groups in the USA.
The U.S. Environmental Protection Agency registration for public health claims are anticipated around the same time the clinical trial results are published, before the end of calendar 2019. Together the results of the clinical trials and the EPA registration will serve as a powerful tools to expand our medical market business.”
He continued, “in response to customer demand, our technology team have added a class leading PFC (Perfluorocarbon) free version to our RepelTX DWR (durable water repellent) portfolio. Perfluorocarbons are extremely harmful to the environment and most major retailers and apparel manufacturers have announced their intention to move to PFC free repellents within the course of a few years, thus creating a large market opportunity for this technology. We will commence shipping this product before the end of calendar year 2019.”
Providing a breakdown of sales in Canadian dollars for its two segments in the current fiscal year, iFabric noted “revenues in the Intimate Apparel division decreased by 60% or $2,025,725 to $1,339,797 from $3,365,522 in Q2 2018, whilst revenues in the Intelligent Fabrics division, increased by 36% or $290,654 to $1,100,783 from $810,129 in 2018.” — NM
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