Style organization Golf & Co. (TASE:GOLF) has once again disappointed its investors, against the background of a persistent crisis in the nearby sector that has observed the collapse of many chains as the threat from on the net acquiring grows.
Golf, controlled by Len Blavatnik’s Clal Industries, posted a net loss of NIS 14 million in the very first quarter of this year, and reported a double-digit percentage drop in income and gross profit and a switch to an operating loss, which swelled on its way to the bottom line due to the fact of a rise in the finance expense.
Like these of rival style chain Fox, which reported earlier this month, Golf’s very first quarter benefits suffered from the late incidence of the Passover vacation, which is commonly an occasion for spending on new clothes, and which this year fell in the second quarter. Golf’s benefits have been also impacted by the closure of its anchor retailer in Hadar Yosef, which in earlier years accounted for three-four% of the group’s income. The shops opened to replace it are nevertheless establishing themselves.
Golf’s share price tag reacted to the release of the financials right now with a 7% decline by the afternoon, on a little volume, but bigger than typical for the stock. This was partly a continuation of the unfavorable sentiment towards the stock in the previous couple of days, arising from fears of achievable unfavorable fallout from the crisis affecting the owners of the Topshop chain, of which Golf holds the Israeli franchise. More than the previous year, Golf’s share price tag has plunged 50%, bringing it to a market place cap of some NIS 100 million, 85% under its peak of some NIS 1 billion towards the finish of 2010.
As talked about, Golf’s top rated line, like that of the other players in the sector, was hit by the timing of the Passover vacation, and fell 12% in comparison with the corresponding quarter final year to NIS 195 million.
In addition, the benefits have been impacted by the longer winter season, which led to “greater than typical discounts”, and by a greater dollar exchange price. Golf reported a quarterly operating loss of NIS eight.five million, which compares with an operating profit of NIS 10 million in the corresponding quarter. The company’s net loss of NIS 14 million compares with a net profit of NIS 7 million in the corresponding quarter.
“I have no doubt that the quarter is not representative,” Golf CEO Raviv Brookmayer told “Globes”, “each due to the fact of what occurred in March, when in style we have been nevertheless promoting the winter collection and not the summer season collection, as a outcome of the climate. I also have no doubt that the truth that Passover fell at the finish of April shifted March vacation sales to April. In our unaudited numbers, in homewares as well our position is greater than that of the market place.”
Unusually, and in order to present a extra optimistic image that neutralizes the impact of the incidence of the vacation, Golf also released figures for the very first third of the year, displaying four% development in sales more than the corresponding period of 2018, and three% development in very same-retailer sales. It really should be talked about, nevertheless, that April this year also integrated an further substantial day for sales, the day of the common election on April 9, which was a public vacation and boosted sales for the whole sector.
On the crisis at Topshop in the US and the UK that has forced it to close dozens of shops, Brookmayer mentioned right now, “We in Israel continue with business enterprise as usual, and extra than that, we want to open two shops in the close to future in Rishon Lezion and in Haifa, which are at the moment the topic of negotiations that have not however matured, to total our deployment.”
Golf also mentions that the individual imports ordinance lately signed by the minister of economy and sector will influence demand for its goods, which is probably to influence their pricing substantially, and therefore the group’s economic position and its benefits.
Published by Globes, Israel business enterprise news – en.globes.co.il – on May perhaps 27, 2019
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