Dubai – Mubasher: Marka’s board is currently working on exiting a number of investments in the sports and fashion sectors after the latter suffered strong losses in the past few years, the company’s board chairman has said.

Marka’s expansion in 2014 “coincided with the general economic downturn across the UAE driven by the global oil price crash. The performance of a number of Marka’s brands deteriorated during this time, particularly in new acquisitions in the sports and fashion segment,” Khalid bin Kalban said, according to a bourse filing.

The company highlighted that following the subsequent losses of this segment, its accumulated losses by the end of June totalled AED 361.3 million by the end of H1-17.

Breaking the losses down, Marka suffered AED 56.9 million in losses in FY14/15 then AED 150.5 million in FY 16, and finally AED 153.9 million in the first six months of 2017, indicating that losses continued to increase over the years.

Accordingly, Dubai-listed Marka’s board decided to exit these “underperforming and low margin fashion and sports segments” as well as restructure its debt facilities “to be in line with the underlying cash flows of the business”, the statement showed.

Marka will also implement “new operational turnaround initiatives” through which it aims to lower costs, bolster revenues, and improve efficiency.

The company said that it will work on ensuring the collection of receivables to enhance its available cash levels of business operations.

Marka last reported a sharp surge in losses by 573.8% to AED 126 million in the second quarter of 2017 up from AED 18.7 million in the year-ago period. The company also suffered AED 154 million in losses between January and June, an increase of 316% year-on-year from AED 37 million.