Fashion house UnderCoverWear (UCW) is expected to suffer a loss of $2.4 million, following its full year financial guidance released today.
UCW directors said the figure of $2.4 million was pre-goodwill and subject to audit, and included an operating loss of $0.8 million.
In a statement made to the Australian Securities Exchange this morning, UCW revealed that the new management team, comprising Rick Lowry,Laurie Fitzgerald and Angela Catford, has conducted an extensive review of all aspects of the business and appropriate provisions have been made. The company said this includes an additional provision of $1.6 million, which has been made in respect of obsolete inventory.
Looking forward, the company said results for May and June 2011 are cash positive, following significant cost saving initiatives in all areas of the business.
“This early trend, combined with the extensive provisioning and new sale initiatives, is expected to allow the company to steadily re-build its business to profitability.”
UnderCoverWear, which has been in operating since 1981, also suffered a loss last year, advising on December 3, 2010 that it expected a drop of up to $250,000 in the six months to December 31, 2010.
The business also ceased local production in December 2010, moving its manufacturing offshore, and experienced a sudden change of hands around the same period, when chief executive Simon Pervan suddenly returned to New Zealand. The role was taken over by principal shareholder John Everet, assisted by Laurie Fitzgerald in her role as general manager sales, and Karen Thorn, in her role as general manager, production & design.