Bono and Ali ethical clothing firm records increasing losses

By Gordon Deegan

Accumulated losses at the ethical clothing company controlled by Bono and Ali Hewson rose to $86.4m (€76.5m) last year.

New figures lodged with the Companies Office show that EDUN Apparel Ltd recorded a loss of $5.7m (€5.1m) in the 12 months to the end of December last.

The loss last year continued the trend of hefty annual losses recorded over recent years for the firm and the 2017 loss followed losses of $6.3m in 2016, $7.56m in 2015 and a $5.57m loss recorded in 2014.

The firm recorded annual losses of $6.4m in 2013; $7.88m in 2012 and $8.5m in 2011 resulting in accumulated losses of $47m since 2011.

Bono and his wife, Ali, established the global fashion brand in 2004 in an effort to bring about positive change through its trading relationship with Africa and its positioning as a creative force in contemporary fashion.

The business sustained a hefty blow in June of this year when luxury brand giant, LVMH, decided to exit the business after the years of continuing losses.

LVMH is the fashion industry’s largest conglomerate and counts Louis Vuitton and Christian Dior among its brands.

LVMH first invested in Edun back in 2009, taking a 49% stake in the business and a spokesman for LVMH in June confirmed that it would effectively return its stake in Edun for no financial consideration.

In a statement at the time of LVMH exiting the business, Edun said: “In light of a joint review of the business, Edun is restructuring its operations in preparation for its next chapter and LVMH will transfer its shares back to the founders. The founders remain committed to Edun’s mission for sustainable fashion and thank LVMH for its support and dedication during this journey together.”

The announcement coincided with reports that Edun was ceasing its operations in the US and followed Edun’s single storefront in New York City, on Lafayette Street in Manhattan, closing at the end of May 2018.

Founded to affect positive change in Africa by promoting trade there and sourcing production throughout the continent, Edun is essentially funded by “shareholder loans,” the 2017 accounts show.

A note said: “The shareholders have confirmed that they will not seek repayment of the said loans for the foreseeable future and they will provide the company with sufficient finances to ensure the continued operation of the company.”

The figures show that EDUN’s net liabilities increased from $57m to $62m during 2017.

The firm’s cash pile during the year decreased from $4.2m to $3.8m.

Directors’ pay at the firm last year reduced from $109,661 to $84,633.