SSI Group, Inc. unlikely to make returns to shareholder in the near term as lease improvements become stranded
SSI Group, Inc. ( SSI ) is a specialty retailer in luxury, bridge, casual, fast fashion, footwear, accessories and luggage. COVID-19 pandemic mitigating measures shrunk SSI’s 1H 2020 sales by 49% as compared to 1H 2019. The decline in sales resulted to a net loss of 476 Million Pesos for SSI. SSI’s gross profit margin remained healthy at around 46%. Despite the healthy profit margin, SSI resulted to a net loss because of its massive opex (operating expenses). Agile companies adopts to emerging circumstances. They are flexible in their cost structures. They can ramp up in times of surging demand and can scale down their costs fast in times of downturn. SSI’s 1H 2020 operating expenditures show that their is an increase in the depreciation and amortization of about 541 Million Pesos. That is 130% larger than the 1H 2019 depreciation and amortization. Depreciation and amortization are non-cash expenses. SSI would have generated cash from operations of around 610 M...