Al Arafa for Investment and Consultancies (Arafa Holding) recorded losses of $144,000 during a three-month period ending in April.
The latest figures for the quarter compare to the profits of $1.6m recorded in the comparison period. The company’s revenues decreased 18% to $40.2m in the period from January to April 2020, compared to $49.2m in the same period last year.
The company’s business results during the first quarter (Q1) of 2020 were affected by the local and global repercussions of the novel coronavirus (COVID-19), particularly during March.
Business was severely affected by the worldwide precautionary measures that were put in place to curb the spread of the disease, including curfews. The measures led to the closure of markets and shops for several months, which prompted the major brands under Arafa Group to freeze or cancel manufacturing orders in Egypt.
Alaa Arafa, Chairperson of Arafa Investment and Consulting Company, said that the pandemic has greatly affected the group’s business results. This was particularly noticeable in the sales figures for Q1 of 2020.
Arafa expects the virus’ effects to appear more on the group’s business results for Q2 of 2020. This will come on the back of losses reported by companies selling through the group, due to the closure of factories and shops, in conjunction with a lack of clarity in export markets.
Many of the group’s major customers announced their inability to fulfill their obligations, including clothing retailer Brooks Brothers, which recently revealed it had resorted to the US bankruptcy law to protect itself. Similarly, Bagir Group and the British chain Debenhams also resorted to the same law in an attempt to protect business in May 2020.
In June 2020, Zara closed 1,200 of its shops worldwide, Arafa said.