Springs ceo discusses results
GDA Staff -- Gifts & Dec, April 1, 2008
São Paulo, Brazil – Sometime between the second half of 2008 and the beginning of 2009, the business trends of Springs Global should begin showing improvement, the company’s chairman and ceo told investors in a conference call today.
But Josue Christiano Gomes da Silva stopped short this time of predicting a return to profitability, as he did last November when he said the company would be profitable by the first quarter of 2008, which just ended. Instead, Silva addressed the fundamentals of the business, which he said were strong, but which had been buffeted by the weakening dollar and slowing U.S. economy – on top of Springs’ continuing transition of manufacturing out of the United States to South America and Mexico.
It was “obviously a year that yielded very poor results, but they are a consequence of what I would say is the largest turnaround in the history of the textile industry in the world,” da Silva said in the English version of the call.
“Obviously we have faced, particularly in the second half of the year, the adjustment in U.S. market conditions,” he said. “Sales started to erode during the last quarter and at this moment in time, U.S. retailers are very active and are managing very well their inventory levels.”
“That, obviously, made our last quarter be worse than what we had expected,” da Silva added.
The company reported an increased net loss of R$429 million on sales of R$3.55 billion for the year – roughly a loss of $242.6 million on sales of $2 billion in U.S. dollars.
However, da Silva noted that R$100 million of that amount was in non-cash charges reflecting currency fluctuations and the investment in foreign subsidiaries.
“We do expect to reduce a little bit the participation of U.S. dollar sales in the sales of the company,” he said, a reflecting of an increasing share of the total business being taken in other global markets.
Da Silva said Springs would remain focused on its core businesses: fashion bedding, bath, basic bedding and, in Brazil, its yarn and fabric business.
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