Western Cape Business News

Send  Share  RSS  Twitter  21 Apr 2010

CLOTHING: Can The House Of Monatic Stand?


Recent Western Cape Business News

CAPE empowerment group Brimstone Investment Corporation looks set to soldier on at century old clothing manufacturer, House of Monatic, despite suffering major set-backs in its ambitions to develop a fashion brand house.

The House of Monatic, along with Seardel’s clothing manufacturing interests, is one of the last few sizeable apparel manufacturers left in the Western Cape.

In Brimstone’s recent results the group’s interests in HoM were hit by a hefty loss of R30 million – a figure which included further write-offs resulting from the liquidation of the Fifth Element group and costs associated with the closure of its Atlantis manufacturing facility.

With Brimstone recently indicating a willingness to sell off its strategic investment in fashion retailer and clothing manufacturer, Rex Trueform, one might be forgiven for thinking that the empowerment company is ready to throw in the towel at HoM. There are probably one or two investors, especially after the recent losses at HoM, who think it might be better to get shot of the clothing manufacturing operations.

But Brimstone directors reckon HoM actually performed well in a challenging market environment by curtailing overheads in its manufacturing operations.

Brimstone directors say the recent closure and sale of its manufacturing operation in Atlantis had an immediate and favourable impact on the company’s overall cash flow position.

In a recent presentation to investment analysts Brimstone deputy chairman Fred Robertson said HoM would be concentrating on the core business and rationalising non-productive lines.

While it’s going to be a struggle operationally for Brimstone to eke a meaningful return from the clothing operations, it does not necessarily mean its all gloom and doom at HoM.

From what CBN hears HoM holds a rather attractive property portfolio that might underpin considerable underlying value at HoM at present and in the future (considering development potential of surplus land).

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