Apex Global Brands, a brand ownership and licensing company headquartered in Sherman Oaks, California, has recently announced a decline in its second-quarter revenues by 22%. For the quarter ending on August 1, 2020, the company reported total revenues of $4.4 million, compared to $5.6 million during the same period last year. The decrease in revenue can be attributed to the non-renewal of certain Cherokee brand licenses and a decrease in sales of licensees’ products due to Covid-19 restrictions.

In addition to the decline in revenues, Apex reported a net loss of $1.3 million, or $2.38 per diluted share, for the second quarter. This is compared to a net loss of $1.3 million, or $2.34 per diluted share, in the previous year’s second quarter. Furthermore, for the first half of the fiscal year, Apex’s revenues totaled $8.4 million, showing a decline of 21% compared to the $10.7 million reported in the same period last year. The net loss for the first half of the fiscal year was $3.2 million, or $5.69 per diluted share, compared to a net loss of $3.5 million, or $6.69 per diluted share, in the previous year.

Apex CEO Henry Stupp expressed the company’s commitment to supporting its licensees and promoting its brands in line with changing consumer interests and behaviors. Stupp also highlighted the significant decrease in selling, general, and administrative expenses facilitated by the adoption of new technologies, such as virtual showrooms, during the pandemic. However, Stupp acknowledged the uncertain long-term impact of the pandemic on licensees’ ability to meet royalty agreements.

Given the ongoing uncertainty caused by the Covid-19 pandemic, Apex has decided not to provide financial guidance for the third quarter or the full fiscal year. The company also emphasized the challenges it may face in obtaining license renewals or new licenses. In addition, Apex revealed that it has entered into a forbearance agreement with its senior secured lender, extending until December 31, 2020. This agreement accelerates the maturity of the company’s underlying debt to March 31, 2021, or December 31, 2020, if certain milestones are not met. Apex noted the significant uncertainty surrounding its efforts to find strategic alternatives that would provide liquidity and enable debt repayment by the maturity date.

Useful links:
1. Apex Global Brands Official Website
2. Apex Global Brands on LinkedIn