Pac Brands offloads workwear
Pacific Brands, which makes socks and underwear brand Bonds and Sheridan sheets, made a net loss of $224.5 million for the year to June 30, compared to a $73.8 million profit in 2012/13.
The company has agreed to sell its workwear division, which owns the Hard Yakka, KingGee and Stubbies brands, to Wesfarmers for $180 million.
The company has also promoted its finance chief David Bortolussi to CEO, replacing John Pollaers who left the company in July amid a boardroom battle over the company’s direction.
Meanwhile, Pacific warned market conditions would remain challenging in 2014/15 as competition continues to hurt profit margins.
The company’s full year profit was weighed down by a $241.8 million goodwill writedown to the workwear division and $46.6 million in restructuring costs.
Pacific lifted sales revenue 3.8 per cent to $1.32 billion during the 2013/14, but earnings dropped more than 25 per cent due to lower profit margins and weakness in the workwear division.
Bortolussi said the sale of the workwear brands would allow the company to focus on the performance of Bonds and Sheridan.
“The sale of Workwear simplifies and focuses Pacific Brands group strategy around maximising the potential of our market leading brands such as Bonds and Sheridan,” he said.
“It also reduces exposure to the challenging industrial market, and restores balance sheet strength to the company.”
Pacific will not pay a final dividend to shareholders.
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