Hit by rising input costs and slowdown in Europe, Mumbai-based Bombay Rayon Fashions Ltd. (BRFL) continues to post losses while slowly going up the learning curve. For the quarter ended September 30, 2013, the company posted a net loss of Rs. 104.85 crore as against the net profit of Rs. 43.58 crore in the corresponding quarter of previous fiscal. The loss, however, narrowed significantly from Rs. 411.75 crore reported in the preceding quarter ended June 30, 2013.
The company is also burdened with debts with following acquisitions in last few years which has hit BRFL’s bottom-line. Acquisition of UK-based DPJ Clothing in 2007 and STI India Ltd. in 2010 has left the company with a debt burden of over Rs. 4,100 crore.
Stubborn losses at the company’s wholly owned subsidiary BRFL Italia Srl, Italy have also hit the bottom-line of the company. BRFL Italia had posted a loss of Rs. 50.82 crore in the FY 2012-13. Other subsidiaries of the company like DPJ Clothing and BRFL Europe B.V. – both based out of Euro area – reported losses of Rs. 2.33 crore and Rs. 5.63 lakh, respectively in FY’13. Due to economic slowdown in Europe and rising costs, BRFL Italia has been shutting down its loss making stores and is in the process of rationalizing the business.