Folli Follie Asia sales overstated by 90 percent

New York - Everything isn’t coming up money at Folli Follie after all. Bloomberg has reported that consultants hired by the company to probe its Asian business have found revenue was almost 90 percent short of figured reported in financial statements, as confirmed by the company on Wednesday.

After a three-month investigation, consulting firm Alvarez & Marsal’s preliminary analysis found that 2017 Asian sales were 117 million dollars, compared with the 1.1 billion dollars the company declared in their recent financial report published last April. Asia accounted for 68 percent of the 2017 reported group revenue, according to data compiled by Bloomberg.

Dimitris and Ekaterini Koutsolioutsos, Follie Follie’s founders, resigned from the company after a board meeting on Tuesday after the report was presented. The Greece-based company’s report was submitted to Greece’s Capital Markets Commission on Wednesday.

Folli Follie has been going through turbulent times since May when hedge fund Quintessential Capital Management said it was shorting the stock because they disputed their revenue. Quintessential reported that sales were much closer to the 117 million dollars than the 1.1 billion projected, which sent shares into a 70 percent spiral and caused the Athens Stock Exchange to suspend trading at the end of the month.

The company also made a loss of 45 million dollars rather than the original reported gain of 316 million dollars as reported by Bloomberg. Folli Follie was granted provisional protection from creditors by a Greek Court to restructure its finances, a plan that was advised by Rothschild, but the firm resigned on Monday. Allen & Overy, a law firm advising the company on their business dealings, also resigned this week.

It’s follies for Folli Follie right now.

Want to stay up-to-date on the latest developments in the fashion industry? Sign up for the FashionUnited newsletter!