Edun line still lossmaking, shareholders fund it with loans
It’s lucky that Bono and Ali Hewson have plenty of money between them because the Edun ethical fashion company that they founded is still haemorrhaging cash.
The ‘green’ brand remained in the red last year with accounts filed at Irleand’s Companies Office showing a loss of $6.3 million (€5.3 million) in the 12-month period. That meant the firm has accumulated losses of a huge $80.6 million (€65.8 million) in total since being founded in 2005.
The company, in which LVMH took a 49% stake in 2009, made a loss of $7.56 million in 2015 and $5.57 million in 2014.
So how does it continue to operate? Founded to effect positive change in Africa by promoting trade there and sourcing production throughout the continent, it is funded by “shareholder loans,” the 2016 accounts show.
That means Bono, Hewson and LVMH continue to pump cash into the firm and it doesn’t look like that situation will end soon. The latest report says that “the shareholders have confirmed that they will not seek repayment of the said loans for the foreseeable future and they will provide the company with sufficient finances” to ensure its continued operation.
The accounts also show that net liabilities rose from $51.67 million to $57 million during the latest year.
Edun’s head office is in New York City and its website says that it is “building long-term, sustainable growth opportunities by supporting manufacturers, community-based initiatives and partnering with African artists and artisans”.
Earlier this month, the brand opened its first-ever retail store, in New York’s Soho, on Lafayette Street.
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