The Bagir Group clothing company’s share price fell sharply after it issued a profit warning due to reduced purchase orders, Globes reported on Thursday.
The downturn comes just five weeks after the Israeli company’s IPO, at which time Bagir labeled British retailer Marks & Spencer as its biggest customer.
In a statement to the London Stock Exchange, Bagir said, “The company has experienced an unexpected reduction in the volume of purchase orders and a reduction in margins on retained revenue from its largest customer predominantly for the fourth quarter of the year. The company also notes that there can now be no certainty that the customer’s previous order patterns with the company will be sustained.
“Following these reductions in purchase orders, the company now expects revenue for the year ending December 31, 2014 to be approximately $100-$104 million and EBITDA to be approximately $4-$6 million. Accordingly, the company has commenced the process of obtaining a waiver from its debt providers regarding its banking covenants.”
Bagir’s share price fell 65.3% to £0.22. It held its IPO at £0.56 at a company value of £28.1 million ($47 million).
Bagir CEO Danny Taragan said, “Clearly the reduction in purchase orders and the reduction in margins on revenue is a major disappointment, however the company plans to take the necessary actions to help mitigate these issues.”