// Billion euro hole found in Folli Follie’s 2017 sales, according to a PwC audit
// The Greek jewellery retailer found to have overstated its revenue as a rescue plan collapses
// Folli Follie is also the owner of Links of London
Folli Follie has been found to have overstated its 2017 revenue by more than €1 billion, according to an audit from PwC.
The news comes as the Greek jewellery retailer, which also operates Links of London, reported that a a rescue plan proposed by bondholders had collapsed.
However, Folli Follie presented an alternative restructuring proposal for creditors and said it expected court ratification of it by June 2020.
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“The board… is confident that the group has a future if the restructuring proposal is approved and is of the view that the restructuring proposal represents a viable alternative and likely the only viable alternative to the company filing for bankruptcy,” the firm said.
Folli Follie grabbed headlines last year when a hedge fund report questioned its accounting.
Earlier this year, it went into turmoil after Greece’s securities regulator slugged the company with a €20.3 million fine for misrepresenting sales in 2016.
Folli Follie’s shares on the Athens Stock Exchange have since been suspended and founder Dimitris Koutsolioutsos has resigned.
There has also been speculation that its Links of London fascia was on the rocks after it reportedly hired advisers from Deloitte to review its options, such as the possibility of a CVA.
When it presented its new rescue proposal, Folli Follie revealed that PwC audit concluded that its 2017 earnings was actually €359.2 million, as opposed to the then-reported €1.4 billion.
It also revealed a net loss of €136.2 million versus the net profit of €216.8 million originally reported.
Folli Follie added that despite the restated figures, the company’s net asset value remained positive.
The firm has a debt of around €430 million which is due this year and in 2021.
“The consolidated financial statements of 2017 set the basis for the company’s future steps as it continues its worldwide commercial activities and enhances its corporate governance,” Folli Follie said.
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