(Filed Under wholesale Sleepwear News). Second quarter sales rose 11.5% at Coconut Grove Pads Inc. (also known as CPG and Coconut Grove Intimates), contributing to another sales increase for parent company iFabric Corporation. The firm has also renewed its license to produce certain products using the Maidenform label through the end of 2020.
In a significant shift, however, iFabric decided not to extend its license to produce Maidenform sleepwear beyond the end of 2018, citing a challenging market in the category, a move that is expected to have a significant negative impact on its sales in the short term.
As a whole, iFabric, which also owns an “intelligent fabrics” division, earned $1.321 million Canadian dollars (CD), (about $994,000 at current exchange rates), on sales of $9.338 CD (about $7.027 million) in the six months ended March 31, 2018, compared to $360,672 CD (about $271,000) on sales of $7.357 million CD (about $5.535 million) in the same period last year.
Sales at the intimates division in the second quarter of 2018 rose to $3,365,521 CD, compared to $3,017,095 CD in the same quarter in 2017. An impressive jump, but far less dramatic than in its previous two quarters. In the first fiscal quarter intimates sales had rocketed up 95% following a 97% jump in the fourth quarter ended September 30, 2017.
The intimates division at iFabric is by far its largest, with sales of $6.849 million CD in the last six months, and $4.808 million CD in the same period last year. It launched about 25 years ago with a patented adhesive bra and has expanded to include over 50 solution bras and bra accessories.
iFabric originally signed the license to use the Maidenform label on its products at the start of 2011, when Maidenform itself was still an independent firm. Following that company’s acquisition by Hanes in 2013, iFabric was able to renew the Maidenform license in the spring of 2015 and at that time expanded the agreement to cover sleepwear.
In April 2015, Hylton Karon, president and CEO of iFabric, declared, “The new agreement underscores the confidence that Hanes has in CGP, as a result of the substantial sales growth that we have achieved in Maidenform branded products since the signing of the original agreement with Maidenform in January 2011. I am particularly excited about the new sleepwear category that has been added to our license. We have had great success with regard to our recent sleepwear offerings and will commence showing the initial Maidenform sleepwear ranges to our customers towards the end of 2015, followed by the official market launch in Q3 of 2016.”
This spring, however, in explaining the reasons for not renewing the Maidenform sleepwear license, Karon countered, “The sleepwear market is becoming increasingly crowded with new major manufacturers entering this market. This will inevitably lead to ever increasing pressure on sleepwear margins, which makes this an unattractive market for us in the future. We have had a good run on sleepwear to date, with excellent profitability and we will now be redeploying these resources to other areas of our business.”
“We are particularly excited about new innovative products that we have recently designed in our core bra and accessories business,” he continued. “We have and will be registering a number of patents in this regard. Whilst sleepwear was a significant contributor to our sales in the last few years, initial response to our new products has been exceptional and I am confident that the revenue from these offerings will exceed lost sleepwear sales over time, and at better margins. In addition, this makes for a simpler business model for our Apparel Division, by elimination of the fashion component as well as meaningful operational cost savings.”
At the same time the company made its licensing announcements, iFabric also reported two areas of business expansion for its textile division, known formally as Intelligent Fabric Technologies (North America) Inc. (IFTNA), which it describes as “focused on proprietary chemical formulations that render fabrics, foams, plastics and numerous other surfaces intelligent.”
Karon explained that “early in 2016, IFTNA commercially launched its innovative technologies directly to the supply chain of a number of well-known and highly regarded global brands in the healthcare and sportswear industries,” adding that the firm “will now be sourcing and manufacturing various private label finished product programs that will be sold into the aforementioned markets, as well as to major retailers.”
“In addition to the new finished product programs, IFTNA has recently added fabric sourcing for current customers who were struggling with their own supply chains.” Karon noted, “The initial programs for the delivery of finished products to a major retailer will commence shipping in Q3, 2018,” — NM
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