Marka share­hold­ers back re­struc­tur­ing ef­forts at re­tailer

The National - News - - BUSINESS - MAH­MOUD KASSEM

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

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