Shares in clothing company Pacific Brands have fallen almost 10 per cent after it unveiled a $219 million first half loss.
The Bonds underwear maker attributed the result to $255 million in writedowns across its Workwear and Brand Collective divisions and $11 million in restructuring costs.
Investors punished the company for the result, pushing its shares down seven cents, or nearly 10 per cent, to 65 cents at the open.
The $219 million net loss for the six months to December 31, compares to a first half net profit of $39 million a year ago.
Pre-tax earnings were down 14 per cent to $55 million as a result of lower wholesales sales in Workwear and Brand Collective and reduced margins across the group.
But the company recorded its first sales growth in five years, with total sales up 2.7 per cent to $656 million due chiefly to the strength of its Bonds and Sheridan brands.
Chief executive John Pollaers said the company was restructuring its Workwear business to reduce costs and target more profitable products and market segments.
Meanwhile, the company was working to lift the performance of Brand Collective, including a decision to exit labels like Diesel and Stussy.
“We are very pleased with our progress overall, but the full benefits of our investments will take time to materialise in the face of significant headwinds, so as we have said previously, earnings performance will be affected in the short term,” Mr Pollaers said.
The company expects its full year earnings to be down around 14 per cent, though it is forecasting a positive sales result.