Blog: Leonie BarrieWorsening woes at Pacific Brands

Leonie Barrie | 28 August 2012

Troubled Australian clothing maker Pacific Brands is in the midst of a multi-year transformation programme that has now claimed its CEO, Sue Morphet, who last week announced plans to step down as the group saw full-year losses widen.

Former Foster's boss John Pollaers is set to take the helm of the company, which markets brands including Berlei, Clarks, Dunlop, Everlast, Hush Puppies and Slazenger.

The changes were revealed as the business posted full year losses of AUD450.7m in the year to June. Goodwill write-downs and an 18% drop in sales were blamed, with Pacific Brands adding that it continues to be buffeted by the lagged impact of last year's record cotton prices.

Figures released in the UK last week also paint a gloomy retail sales picture. One survey suggested UK retail footfall worsened in the quarter ended July, with high streets particularly hard hit by wet weather. Another showed retail sales were flat during August, with only footwear and leather bucking the trend. Worryingly, many firms also expect the business situation to worsen over the next three months.

But there was good news for Hong Kong based Crystal Group, one of Asia's largest apparel manufacturers, which now has four of its manufacturing facilities awarded eco-factory status under Marks & Spencer's Plan A ethical and sustainability programme. The plants, two of which are in China and two in Sri Lanka, produce lingerie and sweaters for the UK-based retailer.

Meanwhile, the United States and Japan have filed complaints against Argentina at the World Trade Organization (WTO), slamming what they describe as the country's widespread use of trade restrictions against foreign goods - including footwear, textiles and apparel. The filings call for WTO consultations with the Argentinean government over measures such as its system of non-automatic import licensing, which "restrict imports and discriminate between imported and domestic goods."

While the United States is home to the world's largest garment consuming country, it has virtually no viable domestic garment making industry. A comment piece on just-style last week suggests the US government might want to level the playing field by offering US garment producers the same benefits as suppliers located in countries that have free trade agreements with the United States.


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