Pacific Brands gets caught with pants down

Shareholders in Pacific Brands will have to wait until 2011 for the clothing and bedding maker to return to growth after adverse exchange rates all but wiped out the benefits of last year’s aggressive cost-cutting program that axed 1850 jobs and shifted part of its manufacturing operations to China.

There was no indication when the company would resume paying dividends, but chief executive Sue Morphet said that a third of the way into its three-year transformational strategy Pacific Brands was now in a position to build profitability.

She is pinning her hopes on the benefits of a reduced cost base as well as better returns on the company’s portfolio of brands such as Bonds and its workwear styles KingGee and Yakka, which should benefit from the mining boom.