Losses continued to mount last year at the ethical clothing company founded by Bono and his wife, Ali Hewson.
New figures lodged with the Companies Office show that Edun Apparel Ltd recorded a loss of $7.88 million (€5.9 million) in the 12 months to the end of December last and this followed the firm recording losses of $8.5 million in 2011.
The two established the global fashion brand in 2005 in an effort to bring about positive change through its trading relationship with Africa and its positioning as a creative force in contemporary fashion.
In spite of the losses, the Hewsons in their directors’ report say they are “very satisfied with progress during the year, which was in line with the (five-year) strategic business plan projections”.
The directors say the company is “ in investment phase and has made much progress in building its supply chain, brand, marketing materials and retail partnerships, as well as the implementation of its mission”.
In a press interview earlier this year commenting on the progress of Edun, Ali Hewson said: “It has been tough, and I think it’s fair to say that we were a little naive about the challenges at the start. We’re not making money yet, but we’ve survived a recession. We’re still in the game and growing. It’s a long-term commitment.”
Accumulated losses total $54.5 million and figures show that the shareholders – Bono, Ali Hewson and the world's largest luxury goods group, LVMH – further propped up the company with an additional $17.8 million in loans in 2012 bringing to €54 million in shareholder loans.
LVMH – which owns some of the world's top luxury brands including Louis Vuitton, Moët & Chandon and designer brand Donna Karan – owns 49 per cent of Edun Apparel.
Arising from the 2009 deal to purchase just under half of Edun, LVMH provides support, investment and infrastructure to help the business grow into a global fashion brand and support its vision to grow trade in Africa.
The figures show that Edun’s net liabilities increased from $29.1 million to $37 million during the year.
A note attached to the accounts addressing the firm’s going-concern status states that the company is financed by way of shareholder loans. “The shareholders have confirmed that they will not seek repayment of the said loans for the foreseeable future and they will provide the company with sufficient finances to ensure the continued operation of the company,” it says.
