(Filed Under wholesale Lingerie News). Comparable store sales at the Intimacy retail chain continued to fall in the first half of 2015, and the store count also shrank to 15 locations in the U.S., with the closing of one since April.
Parent company Van de Velde, reported “A fall in retail turnover at Intimacy by 4.7% (10.3% on a like-for-like basis) in local currency. Due to the strengthening of the American dollar against the euro the retail turnover in euro is up 16.9%.
Meanwhile, sales were up for Van de Velde as a whole. The company owns the brands PrimaDonna, Marie Jo and Andres Sarda as well as retail lingerie chains in Europe.
“Consolidated turnover at Van de Velde in the first half of 2015 rose by 6.0% (from €107.0m to €113.4m) [or about $118 million to $125.1 million based on today’s conversion rates]. On a like-for-like basis (including comparable deliveries) consolidated turnover is up 8.2%. This turnover growth consists of the following components: 8.2% growth in wholesale turnover. The growth continues on all dimensions: lingerie, beachwear and stayers. Also pre-orders for the second half of the year are higher than the same period in the previous year.”
The firm added that, “In Europe retail turnover rose on a like-for-like basis (excluding store closures) by 3.8%, thanks to a like-for-like growth in Germany (16.7%) and the Netherlands (9.7%). The results for the first half of the year 2015 will be announced on Friday 28 August 2015.”
The Belgian-based public company stated in its annual report for 2014, “Intimacy is a big, unexpected disappointment, which keeps both our feet on the ground.” Van de Velde has been frustrated with performance at the U.S. retailer almost since in began its acquisition, in stages, in 2007. In the 2014 annual report it stated, “The turning point in like-for-like growth came in 2008 (which was a tough year in the United States), but Intimacy’s decline has gone on too long.”
Over the eight years that Van de Velde was expanding its ownership stake at Intimacy (which finally reached 100% in early 2015) it repeatedly predicted it would be able to turn things around at the retailer, only to admit at the end of each reporting period that it had not been able to do so. The new owner had hoped that as it dramatically increased the percentage of its own brands in the stores and was able to exert greater management control (as it increased its ownership share) things would get better. But that did not happen.
Now, with Intimacy actually losing money for the company, management appears motivated to try something different. “Major challenges await in 2015. First and foremost, in the United States we will have to thoroughly evaluate our retail subsidiary Intimacy,” declared Lucas Laureys, chairman of the board, in a statement that opened the current annual report. Elsewhere in the report the company emphasized, “At Intimacy we cannot allow the cash drain experienced in 2014 to continue.”
Nowhere in the annual report, however, does the company explain what new remedies it will implement to stop the losses at Intimacy.
In its 2013 annual report, released at a time when the company was operating 15 Intimacy stores in the U.S., Van de Velde had said it was planning to open one new Intimacy store each year through 2017. That statement was not repeated in this year’s report, and the chain shrank by a net one store in 2015.
In recent years the company has closed stores in Dallas, Troy, Michigan, Los Angeles and Garden City, Long Island. Last fall it opened a branch on Fifth Avenue in New York City, where it currently operates three stores. (Today, two stores are open in Chicago, as well as two in California, in San Diego and Costa Mesa. There are also one each in Atlanta, Boston, Houston, Miami, Paramus, Philadelphia, Scottsdale and Washington, D.C.
In the 2014 annual report, Van de Velde admitted, “In the United States we have been unable to get Intimacy’s engine running. This is despite the same principles being applied as in other countries. Marketing continues not to be strong enough in the United States and implementation on the shop floor could be better – despite the best efforts of local management.”
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