NEW YORK and POZNAN, Poland, April 14, 2010 (GLOBE NEWSWIRE) -- Sunset Suits Holdings, Inc. (OTCBB:SNSX), a leading designer and retailer of high quality menswear, announced the sale of Fashion Service Sp., the company's wholly-owned manufacturing subsidiary in Poland, for US$16,000 in cash and the assumption of all assets and liabilities of Fashion Service Sp., except for long-term debt totaling US$6.8 million, which will remain with Sunset Suits. As a result, the company anticipates an increase in shareholders' equity of more than $6.2 million, due to a reduction in the company's total liabilities. The company was sold to XCRITO Ltd., a company headquartered in Limassol, Cyprus.
Mr. Miroslaw Kranik, Chief Executive Officer of Sunset Suits, commented, "The sale of Fashion Service Sp. in Poland marks an important milestone in our restructuring plan to improve profitability begun in the fourth quarter of 2009. Our decision to outsource manufacturing will help ensure our ability to meet increasing demand for shirts and casual attire which comprise the most rapidly growing segment of our business and which Fashion Service was not equipped to handle, since it is mainly a suit manufacturer. Capacity was not being fully utilized at the facility and would have required major upgrades to satisfy our needs. A shift in product mix toward our highest selling items combined with a focus on retail expansion, should bring overall gross margins closer to our target goal of 70% versus current levels, which have approximated just under 60% for the past two years. At the same time, we expect this transaction will help to significantly reduce our operating costs and improve overall profitability for the company."
Mr. Kranik continued, "With plans for geographic expansion over the next few years, our ability to produce quality merchandise at a brisk pace while achieving economies of scale has become paramount to our continued success as a leader in men's fashion. To that end, we made the decision to sell our manufacturing operations in Poland and to outsource manufacturing of our merchandise to facilities in both Poland and the Far East. The plan is to bring new fabric blends and fresh fashion looks to our customer base at attractive price points -- and to do so in a very cost-effective way."
About Sunset Suits Holdings
Sunset Suits is a designer and retailer of high quality menswear based in Poland. The company's merchandise includes suits, sport coats, slacks, dress shirts and ties. Sunset Suits distributes its clothing primarily through its sales outlets. The company operates 85 domestic retail stores in Poland, 3 stores in Latvia, 8 stores in the Czech Republic, and 5 stores in Lithuania. Sunset Suits targets men in the 18 to 35 year-old age group, one of the most rapidly developing demographics in the industry.
This press release may contain forward looking statements. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, forward-looking statements contain terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect the Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, readers should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to: general economic conditions; expectations regarding the Company's ability to maintain and grow its business; expectations regarding the continued growth of the Polish clothing industry; beliefs regarding the competitiveness of the Company's products; expectations with respect to increased revenue growth and the ability to achieve increased profitability; future business development, results of operations and financial condition; and competition from other apparel companies. Also, forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release and actual future results may be materially different from what the Company expects. Readers are encouraged to review the "Risks Factors" section in the Company's Registration Statement on Form S-1/A filed on January 12, 2010. The Company assumes no obligation, and does not intend, to update any forward-looking statements, except as required by law.