Fruit of the Loom revenues increase 45% to €227.7m
According to accounts just filed, the group’s revenues increased by 45% from €156m to €227.7m in the 12 months to the end of December last.
Last year’s pre-tax profit of €11.3m followed the company recording a loss of €27m in 2009.
The directors state that the company’s manufacturing capacity in Morocco continued to come on line at a pace and contributed to 96% of the group’s operation profit being recorded in the second half of last year.
Fruit of the Loom is owned by Warren Buffett’s conglomerate, Berkshire Hathaway.
At its peak, the US-owned clothing manufacturer employed 3,500 people in six plants in the island of Ireland.
However, in 2004, the company announced that it would shut its remaining two factories with the loss of 650 jobs in Donegal and Derry before the end of 2009.
The company made the decision in order to transfer its spinning, knitting and dyeing operations to Morocco, where it employs 1,700 people and has cheaper labour costs.
A subsidiary of the Fruit of the Loom — Fruit of the Loom International Ltd — operates at Lisfannon Business Centre, Buncrana and employs 24 people.
According to accounts filed by Fruit of the Loom International, “2010 has proved to be a very turbulent year for the textile and apparel sector. The significant movements in cotton prices and disruption in external supply of finished goods from key supply countries, created a very unstable market.”
The report states: “The cost pressure from the cotton movements were of such a scale that it was deemed necessary to push through price increases. This was after nearly a decade of price reductions. Despite this, demand remained strong and those who could service the business took the orders.”
The directors state that they recognise the business continues to face cost and supply pressures into 2011. The report states: “Cotton price has continued to increase to historic levels and has remained stubbornly high for the first six months of the year.
They further state: “The construction of a new distribution centre in Morocco is well underway. This will significantly improve the distribution efficiencies from our manufacturing units to customer base.”
The company had a shareholders’ deficit of €38.2m at the end of 2010.
The profits take account of a non-cash depreciation cost of €36.9m.
The company’s staff costs increased by 37% from €21.8m to €30m and this follows staff numbers increasing by 635 from 2,568 to 3,203.
