Harrington Collection’s Financial Performance
Harrington Collection has not been performing well. The sales and margins for the past three years have been at an all time low. In 2005, sales were only 1,390 million, while in 2006, sales were 1,345 and in 2007, they were 1,344. Because of low sales,At the same time the gross profit rate has been decreasing. In 2007, the gross profit margin for Harrington Collection’s Manufacturing Group decreased 1.55%, and in the Retail Group it dropped 0.95%. This is a total decrease of 1.37%. This means that the Manufacturing branch is losing the majority of the company’s profits. The Manufacturing Group, dedicated to designing, producing, and marketing upscale women’s apparel, accounted for 50.3% of company profits in 2007. The Retail Group, focused on retail-based operations for company-owned stores, accounted for 49.7% of profits in 2007.
When the financial reports of Harrington Collection were analyzed, some important things were uncovered. Firstly, expenses are