Marka shareholders back restructuring efforts at retailer
Marka, the retailer which started restructuring its business earlier this year after failing to turn a profit since its 2014 listing in Dubai, plans to sell underperforming assets, restructure its debt, and contain costs.
“Over the past few months Marka has restructured its divisions, exited underperforming businesses and applied a strict cost control programme across the company – and we expect to see positive outcomes from these activities during the remainder of 2017 and beyond,” said Khaled Bin Kalban, the company’s chairman.
“The approval today by Marka’s shareholders gives the board of directors and management team a clear mandate to continue with restructuring efforts in order to build a strong future for the company.”
Marka has accumulated losses of Dh361.3 million since 2014, the company said in a regulatory filing to Dubai Financial Market, where its shares are traded.
The company has “taken steps to sell or close the vast majority of fashion and sport brands while also undertaking a significant reduction in overhead costs.”
In August, Marka reported deepening losses for the second quarter, with falling revenues compounded by rising expenses and impairments.
It said losses for the three months to the end of June this year rose to Dh126m, compared with Dh17.9m in the same period last year, and Dh27.8m in the first quarter of the year. The company booked a Dh55m property and equipment impairment for the second quarter of 2017, and general and administrative expenses more than doubled to Dh44.8m.
Revenues fell by about a third to Dh25.5m for the period. Marka said its remaining debt obligations are in the process of being rescheduled, including talks related to interest repayment terms.
The company, which listed in September 2014, initially expanded rapidly into retail, food and beverage and children’s entertainment outlets, but has been since been caught out by falling disposable income.
Marka has accumulated losses of Dh361.3m since 2014, the company said in a regulatory filing