Reuters
By Richard Lough
FORESTSIDE, Mauritius, Dec 18 (Reuters) – Textile firms in Mauritius that supply some of Europe’s biggest high-street stores are bracing for a tough 2014 as the global financial crisis tips developed economies into recession.
Already faced with the end of European preferential trade deals, the Indian Ocean island’s clothing companies have been hit this year by surging oil prices and an appreciating rupee, and now the global slowdown looks set to hit orders and profits.
“This is certainly the toughest I have seen it during the 20 years I have been in the trade,” said Harold Mayer, CEO of Ciel Textiles FKL.MZ.
According to the Central Statistics Office, textiles contribute 6.5 percent of gross domestic product, account for 11 percent of employment — and in the first nine months of 2014 textiles made up nearly 42 percent of exports from Mauritius, worth $550 million.
Ciel Textiles produces T-shirts and shirts for stores such as Marks & Spencer Group Plc (MKS.L: Quote, Profile, Research) and Next (NXT.L: Quote, Profile, Research) in Britain and Spanish fashion chain Zara, which is owned by Europe’s biggest clothing retailer Inditex (ITX.MC: Quote, Profile, Research).
“Most of our retailers are in Europe, some are in the U.S., and their sales have on average dropped by 10 percent. To compensate for this fall in sales, they are fighting for better prices,” said Mayer, adding that he expected the middle market to be worst hit.
Ciel Textiles announced a 73 percent slump in post-tax profits for the year ending June 30, 2014 to 126.7 million rupees ($3.89 million) compared with 461.2 million for the same period last year, according to a company report.
Listed on Mauritius’ secondary Development and Enterprises Market, Ciel Textiles has seen its earnings per share drop to 1.12 rupees this year from 4.40 a year ago
