Wednesday 17 January 2018

Redundancy costs push Fruit of the Loom further into the red

Restructuring costs at the Irish-based Fruit of the Loom pushed the business further into the red last year
Restructuring costs at the Irish-based Fruit of the Loom pushed the business further into the red last year

Gordon Deegan

Restructuring costs at the Irish-based Fruit of the Loom firm pushed the business further into the red last year.

New accounts filed by Dublin registered FOL International - which is owned by the Warren Buffet controlled company Berkshire Hathaway - show that the firm recorded a pre-tax loss last year of €6.78m and this followed pre-tax losses of €23.49m in 2012.

FOL International represents clothing manufacturer Fruit of the Loom's European operations.

The accounts show that the loss last year occurred after restructuring costs of €6.35m.

At its peak, iconic US brand Fruit of the Loom employed 3,500 people in six plants on the island of Ireland.

Last year's restructuring comes almost a decade after the company announced in 2004 that it would shut its remaining two factories with the loss of 650 jobs in Donegal and Derry.

The company today retains a small operation at Buncrana in Co Donegal and the directors' report shows the firm narrowed its losses after revenues dipped from €248.48m to €241.6m.

According to the directors' report: "The 2013 trading performance showed a significant improvement on prior year for the European group".

The €6.35m restructuring costs last year represented mainly redundancy payments due to Fruit of the Loom's decision to exit the retail mass market business.

On the group's future developments, the directors state that "the significant improvement in operating results has continued into 2014 with the attention of the business fully focused on the core activities which drive contribution and a continued exit of the brands/service which do not".

The losses resulted in the firm having accumulated losses of €255m. The firm's shareholder deficit totalled €68m. The loss takes account of non-cash depreciation costs of €10.86m.

Irish Independent

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