The annual revenue of Damas, which last month signed an
extension to a standstill agreement on $872m of debt with most of its bank
creditors, fell 31 percent to $898.54 billion over corresponding period last
year, the company said. Gross profits declined by 33 percent to $153.84
million, it added.
The company, with about 450 stores around the world, blamed
the global downturn, low consumer confidence and raised gold prices for a
decline in total sales volume.
The Dubai-based retailer, which set aside money to cover
losses from investments and an erosion in the value of inventory, said its
non-recurring expenses and impairment charges stood at $522.79 million.
“In making these provisions, Damas is recognizing the
challenges of the past 12 months while ensuring that the company’s efforts are
focused on recovering outstanding receivables held by counterparties in an
orderly manner,” the firm said.
Damas shares, that closed unchanged at 16 cents on Nasdaq
Dubai on July 29, didn’t trade on Sunday due to holiday. The shares have fallen
30 percent this year, putting the value of the company at $158 million.
“Damas continues to move forward with its financial
restructuring, demonstrating the confidence of our bank lenders in the strength
of the company’s underlying business model, while also preparing for the
implementation of our operational restructuring, which will allow the company
to sustain its growth trajectory despite current challenging conditions,” said
Anan Fakhreddin, Chief Executive Officer of Damas International.
In March, the founders of Damas International — Tawhid,
Tawfiq and Tamjid Abdullah — were fined and banned from executive positions at
any Dubai International Financial Centre company for between five and 10 years
as the emirate’s financial markets watchdog found they had committed a series
of “unauthorized transactions”.
Dubai’s Financial Services Authority fined Damas
International, and the brothers, a total of $3.72 million and ordered them to
repay $99.4 million plus the value of approximately 1.9 million grams of gold
after it was found that they had withdrawn from the company’s funds for their
personal use without disclosing it to the board.
In June, the jeweler appointed the company’s founding
brothers, who missed the first scheduled repayment of $55m due in April, as
senior advisors.
In a statement to Nasdaq Dubai, Damas last month said that
the company’s standstill agreement on $872m of debt with most of its creditors
has been extended until September 30 to allow the company to complete its
restructuring plan.
The retailer, which is pushing ahead with its expansion, is
planning to open as many as 100 stores in India over three years. It has
assigned a board member to conduct market research in India over the next two months.
