Arafa Holding is set to reorganize the company's subsidiaries according to market segments versus the former approach of operational segmentation, Beltone Financial reported in a note. Arafa's three market segments will be: luxury wear, formal wear and casual wear, as opposed to the segments of retail, apparel and tailoring, and textiles, previously. According to Arafa, the newly adopted market segment reporting is intended to respond to market needs more proactively and accordingly, enhance future group prospects, Beltone reported. It is also set to make the firm “more investor and research analyst friendly” as well as make way for “more efficient resource management, [and] establish[ing] better management accountability.” The company's board of directors also approved the issuance of round two of share dividends (1:10), as per the company's general assembly's decision in May 23. The distribution date is yet to be decided, pending regulatory procedures and approvals. Beltone commented, “Arafa is shifting its strategy, whereby it is focusing currently on increasing the contribution of the luxury business, following the company's successful efforts to lower its exposure to the slower growth in the UK's formal middle market.” The company first restructured its European subsidiaries to cut costs and improve the group's profitability. Arafa is in the process of relocating its casual production lines to its newly-opened facility in Beni Suef in Upper Egypt, “to capitalize on the low-cost environment (saving transportation costs, and cutting [around] 20 percent of labor costs), government incentives (tax breaks and export incentives), as well as obtaining QIZ qualification, which would give the company an edge in exporting to the recovering US casual market,” according to Beltone.
