Concrete Fashion Group records $12.8m of profits in FY 2023
Concrete Fashion Group for Commercial and Industrial Investments, Egypt’s leading luxury apparel manufacturer, retailer, and exporter, reported a 3.2% increase in consolidated net profit for fiscal year 2023 (ending 31 January 2024), reaching $12.8m.
The company’s audited financial statements, released Wednesday, also revealed a 3.4% year-on-year increase in consolidated net sales, totalling $150.8m. EBITDA grew by 35.2% to $37.4m, driven by improved profitability in both manufacturing and retail segments.
This growth was achieved despite increased financing costs on both foreign currency and Egyptian pound (EGP) denominated debt.
“This landmark decision [the demerger from Arafa Holding] enables us to concentrate on developing our core business,” said Alaa Arafa, Group Vice Chairperson and Chief Executive Officer.
The focus will be on the local fashion brand Concrete and the company’s export operations, with the aim to leverage Egypt’s expanding domestic market and its cost competitiveness as a manufacturing hub.
Both retail and export operations saw growth in net sales, operating profit, and net profit in FY 2023. The retail segment, including Concrete and Euromed, recorded $29.7m in net sales. The manufacturing segment, which includes suits, jackets, shirts, and trousers manufacturing, reported $127.6m.
This includes results from the Group’s suits and jackets manufacturing business units Swiss Garments Company (SGC) and Egypt Tailoring Company (ETC), its shirts manufacturing business unit Cristall for Making Shirts (Cristall), and its trousers manufacturing business unit Swiss Cotton Garments Company (SCGC).
Total pieces sold in the manufacturing segment declined due to a strategic shift towards higher-margin clients, a move reflected in improved margins. The retail segment saw a 60.7% increase in pieces sold, driven by Concrete’s expansion of stores, new lines (including a teens collection), and new sizes.
During the past twelve months, the Group inaugurated multiple new stores in strategic neighbourhoods and cities within and outside Greater Cairo including El Gouna on the Red Sea.
Looking ahead, Concrete Fashion Group plans to continue expanding domestically and boost online sales. Internationally, Concrete Fashion Group continued expanding its client base and geographic reach, and today it boasts a client portfolio ranging from Massimo Dutti, Boggi Milano, Armani, Ted Baker and Holy Fashion Group in the European market to Brooks Brothers, Macy’s and Peerless in the American market as well as Ramsy and KIP in the Turkish market.
In the manufacturing sector, the company aims to capitalise on Egypt’s attractiveness to international brands relocating supply chains, driving sales, attracting foreign currency, and creating jobs. The company will continue to optimise its client mix towards higher-margin partners.
“We are confident that the local clothing industry is well-placed for sustained growth in the coming years,” said Arafa.
He added that in FY 2024 they will continue optimising their client mix in favour of partners and markets typically associated with higher margins, reliable order pipelines, and attractive growth prospects to support the sustainable expansion of their export operations.