The huge challenge of making ethical fashion viable in the wake of relentless competition from low priced, fast fashion brands has been brought into sharp focus with news that ethical clothing brand which U2 frontman Bono launched in 2005 with his wife, Ali Hewson, EDUN Apparel’s latest accounts show the business made a US$7.88 million loss in the 12 months to December 2012. This brings accumulated losses at the fashion retailer to a total of US$54.5 million.
Despite the situation, directors at the company state in the report that they are “very satisfied with progress during the year, which was in line with the (five-year) strategic business plan projections”.
“It has been tough, and I think it’s fair to say that we were a little naive about the challenges at the start,” admitted Ali Hewson in a press conference earlier this year. “We’re not making money yet, but we’ve survived a recession. We’re still in the game and growing. It’s a long-term commitment.”
EDUN’s monetary problems are hardly news. The brand had amassed a debt of $11 million when Louis Vuitton Moët Hennessy, the world’s largest luxury goods group, purchased a 49 percent majority stake in 2009. The influx of cash, mostly by way of shareholder loans, has allowed EDUN to retain its “going concern” status.
Shareholders have confirmed they will not seek repayment for the “foreseeable future” and will provide the company with “sufficient finances to ensure [its] continued operation.”
