Cherokee Global revenue down, CEO optimistic
After facing several financial and business uncertainties in the first-half of fiscal 2019, Cherokee Global Brands has managed to jump back on dry land, for now.
The global brand marketing platform, which owns brands like Cherokee, Carole Little, Tony Hawk Signature Apparel and Hawk Brands, Liz Lange, and Sideout, has been facing liquidity challenges with recurring operating losses and negative cash flows.
On Thursday, CEO Henry Stupp, said the business is starting to get back on track with a very productive first-half of fiscal 2019, but still much work to come for the company.
“We restructured and realigned our business operations, converted our remaining indirect sales business to a licensing model, shored up our financial and liquidity position, divested non-core assets, and positioned our brands and licensees for future growth. We enter the back half of fiscal 2019 with a streamlined organization, and importantly, an energized sales and marketing focus,” Stupp said, in a news statement.
“Our 360° platform is driving growth in new and exciting areas. Our unique approach enables us to flex both our owned, high-equity brands as well as design and develop exciting products for new and existing retail partners, further leveraging our brand development capabilities. The scalability, relevance and vision of our brands are leading us to be a more agile and responsive company than ever before,” he added.
Moreover, the company was able to successful re-finance its debt facility in August through a new agreement with Gordon Brothers Finance Company and Gordon Brothers.
On Thursday, the company reported financial results for its second fiscal quarter ended August 4, 2018, including a double-digit drop in revenue to $7.1 million.
Operating loss for the second quarter was $2.4 million, compared to $1.1 million in the second quarter of the prior year.
The year-over-year decline was attributed to the transition of the Company’s Tony Hawk, Cherokee, and the Liz Lange brands in the U.S. from a direct-to-retail model to new wholesale licensing partners, as well as the sale of Flip Flop Shops.
The company narrowed its guidance for the fiscal year with revenues now expected to be in the range of $25 to $26.5 million, as opposed to $25 to $27 million.
Cherokee currently maintains license agreements with leading retailers and manufacturers that span approximately 80 countries and approximately 20,000 retail doors plus ecommerce.
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