Morocco transfer eats into Fruit of the Loom profits
Published 25/10/2010 | 05:00
PRETAX earnings at Fruit of the Loom fell by almost 30pc last year as costs relating to the phased transfer of operations to Morocco took their toll.
The profit fall is revealed in accounts just filed for the Donegal-based textiles company owned by US billionaire Warren Buffet.
The filings show that while profits fell by 28pc to €30.4m, revenues dipped 12pc to €127m.
In their report, Fruit of the Loom directors say: "2009 proved to be an extremely difficult year and a continuation of the very unfavourable trading experienced at the end of 2008."
They add that all of the start-up costs for the Moroccan manufacturing centre were recorded last year, as well as restructuring costs totalling €2.1m.
At its peak, Fruit of the Loom employed 3,500 people in Ireland. In 2004, it announced it would shut its remaining two factories here with the loss of 650 jobs before the end of 2009. This involved the transfer of spinning, knitting and dyeing operations to Morocco, where it has cheaper labour costs.
Fruit of the Loom International Ltd's registered address remains at Lisfannon Business Centre, Buncrana, where the principal activity is sourcing for sale of finished goods.
The directors say: "Demand continued to be extremely weak, with distributors destocking aggressively and promotional spends put on hold."