Marka fails to meet promise of profit in 2016

15/02/2017 05:46 AST

Marka, the UAE's first listed retail company, has reported a loss of Dh88 million for 2016, despite the company's Vice- Chairman and Managing Director, Khalid Al Muhairi, assuring investors at the end of 2015 that the company intended to become profitable last year. Failing to record a profitable quarter since it was listed on the stock market in 2014, Marka saw an increase in revenue of over 35 per cent in 2016.

The company's turnover grew to Dh291 million, an increase of over 35 per cent from 2015. It said in a statement on the Dubai Financial Market (DFM) that the increased revenue was due to new stores opening during the year.

Net losses of Dh88 million in 2016 represented a further fall of 55 per cent on 2015's losses of Dh56.9 million.

Marka has aggressively expanded in recent years against a backdrop of a weakening consumer segment, exacerbated by a low oil price environment, job losses and the drop in tourist spending.

Nick Peel, Marka's CEO, resigned in December 2016. He has yet to be replaced.The annual loss follows reports of several new deals for the company.

On Monday, it announced the launch of its home-grown retail concept called Paris 68, which is expected to open its first outlet in the first quarter of 2017.

In January 2017, the company signed a five-year licensing deal with Real Madrid, to manufacture, distribute, and sell an exclusive line of branded clothing in the GCC. At the announcement of Marka's deal with the football club last month, Al Muhairi said that he thought the market cycle had bottomed out, and with oil prices rebounding, he expected the retailer to reach profitability in 2017.

Shareholder Equity stood at Dh352m, down from Dh453m in 2015. Marka's shares on the Dubai bourse ended the day 2.1 per cent higher to reach Dh1.47.

Gulfnews