Bagir, a renowned tailoring specialist based in London, recently announced a decrease in revenues for the first half of the year, leading to a financial loss due to higher production costs. The company experienced a drop in revenues from $28.1 million to $24.8 million, resulting in an adjusted Ebitda loss of $1.7 million, compared to a profit of $1.1 million the previous year. Additionally, the gross margin decreased significantly from 16.4% to 6.7%.
Despite these challenges, there is a sense of optimism at Bagir, especially with the recent investment from Shandong Ruyi. The company is taking proactive measures to enhance its operations and improve financial performance. One of these initiatives includes selling a majority stake to Shandong Ruyi for $16.5 million. This move is expected to provide the necessary financial support for business growth and the expansion of Bagir’s manufacturing site in Ethiopia. CEO Eran Itzhak expressed confidence in the collaboration with Shandong Ruyi, believing it will bring about positive transformations for Bagir.
Although the first half of the year presented difficulties, Bagir remains hopeful about its sales outlook, in line with management’s projections. The company has identified operational delays and increased production costs as key factors affecting profitability and gross margin. Looking ahead, Bagir is focusing on penetrating the US market, leveraging its manufacturing facilities to export goods duty-free into the country. The US market offers significant order sizes and a competitive edge for Bagir.
A crucial milestone for Bagir is the upcoming Extraordinary General Meeting scheduled for October 9, where shareholders will vote on the Shandong Ruyi takeover. With the impending investment from Shandong Ruyi and efforts to streamline operations and production sites, Bagir anticipates positioning itself as a major player in the apparel manufacturing sector. Overall, the company is enthusiastic about its future growth prospects and the opportunities that lie ahead through strategic partnerships and operational enhancements.
For more information on Bagir and its recent developments, you can visit their official website here. Additionally, to stay updated on the latest trends in the apparel manufacturing market, you can access industry insights here.
