Bagir Group embarks on recovery plan to cut costs
Formal wear tailoring firm Bagir Group is to embark on a two-year recovery plan to increase its competitiveness and save the business at least US$3m a year, after warning its full-year results will be below expectations.
The plan, which is expected to save the company $1-1.5m this year, will include a restructuring of the company's management processes, with efficiency improvements supported by additional IT development. Production will also be reorganised, including the group's new Ethiopian factory, which Bagir invested in last year.
As it is developed, the facility is expected to give the group a “strong competitive advantage” due to its duty-free exports to the EU and US, its competitive production costs and the Ethiopian government’s support for textile employment. It is expected to start making a significant contribution to the group starting early 2016.
Bagir also said it will continue to focus on growing its quality tailored men's wear private label business through existing and new customers, and further develop its brand licensing activity, mainly in the US.
In the UK, the company is to focus its brand efforts on Peckham Rye and has not extended its license agreement with Simon Carter beyond 2016. This, it said, will have minimal impact on its future revenues.
“Our increased competitive advantages and our new factory in Ethiopia along with the additional private label sales are expected to deliver improved results in future years,” said CEO Danny Taragan.
Meanwhile, Bagir said it now expects EBITDA to be “marginally below expectations” and revenue to reach $97m for the year ending 31 December 2014, due to the devaluation of the pound\dollar exchange rate.
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