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iFabric Reports Q2 Loss On Declining Sales

(Filed Under wholesale Lingerie News). iFabric lost Can$479,436 (about $353,000 at current exchange rates) on sales of Can$2,252,090 (about $1,660,000) in the quarter ended March 31, 2020, compared to a loss of Can$386,944 on sales of Can$2,503,793 in the same quarter last year.

Meanwhile the company has had sucess with a fabric treatment that deactivates the COVID-19 causing virus.

The Toronto-based firm has two main branches. The Coconut Grove intimates division offers adhesive bras, solution products and accessores under the brand names Maidenform, The Natural and Wick’em. The Intelligent Fabrics division develops “innovative products and treatments that are suitable for application to textiles, plastics, liquids, and hard surfaces as well as finished performance apparel which integrate one or more such treatments.”

Commenting on the quarter, president and CEO Hylton Karon declared, “whilst the current COVID-19 pandemic affected iFabric in both its divisions, I am pleased to report that we acted quickly to contain any major damage to our operations and to preserve our operating assets. With our recent positive testing of the efficacy of our flagship technology, PROTX2, in deactivating the COVID-19 causing virus, we are in the fortunate position of having a great opportunity to grow our business and at the same time to provide a much needed additional level of protection for frontline healthcare workers as well as communities at large.”

One company that is now utilizing the fabric treament is Under Armour, which recently launched its patent pending Sportsmask, “a reusable, water-resistant performance face mask designed for maximum breathability.” According to that company the mask “functions to reduce the spread of respiratory droplets by the wearer,” and contains three layers, one of which “is treated with PROTX2, a non-metal anti-microbial technology which inhibits growth of bacteria on the mask.”

iFabric explained that “at the beginning of the quarter, during the early stages of the COVID-19 pandemic, the Intelligent Fabrics division saw an impact not only to its revenues, but to its supply chains as well, particularly in China, which was the first country to initiate a lockdown. Large finished performance apparel programs which had been planned for launch during the spring have been delayed and rescheduled to the summer and fall seasons. This decrease in sales was partially offset by the roll out of a new finished apparel program in Canada in January, for which product had already been received. Towards the end of the quarter in March, restrictions in Asia had been lifted and sales in the region commenced returning to normal, however this was partially offset by a decrease in sales in North America as the COVID-19 pandemic and subsequent lockdowns took effect in this region. Whilst the revenues of the Intelligent Fabrics division showed a year over year increase, this increase was not as large as anticipated due to the global effect of the COVID-19 pandemic.”

The company continued, “in the Intimate Apparel division, a negative impact on revenues was seen in March, towards the end of the quarter, as North America moved into a lockdown phase. The bulk of the revenues for this division are to North American retail customers.”

The company also commented on a license obligation, referring, it is believed, to its worldwide agreement for the use of the Maidenform brand on certain intimate apparel. “During the license term, the company is required to pay a quarterly royalty on its net sales as defined in the agreement, on all products sold under the licensed marks. The effective royalty rates vary depending on the distribution channel and range from 4-10%. Minimum annual royalties have been established for the balance of the contract period ending December 31, 2020 in U.S. dollar amounts of $187,000. In addition, the company is required to pay an advertising fee of 1-2%, depending on the distribution channel, payable quarterly, on its net sales as defined in the agreement, for promotion of the licensed products. The license term is in effect until December 31, 2020.” — NM

more wholesale Lingerie News >>

Published 06-17-2020 by Nick Monjo

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