Companies are required to publish their audited annual financial statements within three months of the close of their fiscal year, which for Global Brands was on March 31.
But Global Brands said it is still in talks with its auditors “relating to the use of a going concern basis in the preparation of the group’s financial statements.” Specifically, the back and forth concerns the company’s “evaluation of various options in respect of its financial position, including the possible sale, disposal and restructuring of certain assets and/or businesses of the group.”
The company is still in talks with its auditors, but its shares now sit idle on the Hong Kong Stock Exchange at 0.189 Hong Kong dollars, making for a market capitalization of 194.4 million Hong Kong dollars, or about $25 million.
Global Brands was formed in 2005 as a division of sourcing giant Li & Fung and managed private brands. It was spun off and debuted on the Hong Kong stock exchange in 2014.
The company — which grew out of what was once a powerhouse player supplying goods to major retailers — sought to keep up with changes in the industry, but those changes simply came too fast when COVID-19 hit.
Global Brands logged a net loss of $120 million for the six months ended Sept. 30 and pegged its liabilities at more than $899 million, including trade payables of $374 million to external parties that were past due.
In May, the company sold off its Spyder division in South Korea, raising $19.5 million that it earmarked for operating funds as it negotiated with lenders.
Last month, WWD reported that two of the company’s biggest licensed brands, Spyder and Frye, have transitioned back to their owner, Authentic Brands Group. GBG also has licensed businesses with Ellen Tracy, All Saints and Sean John and directly owns Aquatalia and Ely & Walker.
Sources said GBG might look to auction off assets with the help of a bankruptcy court.
MORE FROM WWD: