(Filed Under Financial and General Interest News). First half sales and profits declined at both Calida and Aubade, the intimates and underwear divisions of Swiss parent Calida Group (which now also has divisions that produce furniture, mountain equipment and apparel and surfwear).
Company executives blamed the “decision taken by the Swiss National Bank to stop defending the 1.20 exchange rate to the euro,” which occurred at the beginning of the year, as well as a “strong move in the euro’s exchange rate against the U.S. dollar” and “turbulences on the foreign-exchange markets and the cyclical weakness, especially in the southern European markets,” for its problems.
In a letter included with the financial results for the first half, Dr. Thomas Lustenberger, chairman and Felix Sulzberger, CEO wrote the Calida division “suffered a fall of CHF 4.6 million [Swiss francs, approximately $4.71 million at today’s exchange rates] in net sales (-7.7%). That is, however, almost entirely due to the change in the euro exchange rate. At constant exchange rates, the decline in net sales was merely 1%. Positive developments were recorded here in the sales channels we operate directly, namely retail (Calida stores) with +4.3%, outlet +10.8% and direct internet sales with +32.7%. The only negative figure, -6.1%, came from our wholesale business. The Calida Division’s contribution to our operating profit also fell, primarily due to currency effects, from CHF 15.3 million to CHF 12.5 million [about $12.8 million], corresponding to -18.3%.”
The two executives added, “What was not satisfactory, on the other hand, was the course of the first half of 2015 for the Aubade Division. After several very profitable years of growth, Aubade suffered its first setback in 2014 with a decline in net sales of 2%. This negative trend continued into the first half of 2015, with net sales again falling by 2% to EUR 26.4 million [about $29.42 million]. This development affected especially our principal market, France, where consumer demand was weak, particularly in the first four months. Another unsatisfactory factor was business done through traditional specialist retailers, and Aubade’s own boutiques had to contend with a decline in net sales of 4.9%. Despite good cost containment and a continuingly excellent gross margin, Aubade’s contribution to our operating profit was down by 3.6% at EUR 6.7 million [about $7.47 million]. One of the division’s weaknesses is the very strong dependence of its net sales on the French market, where around two thirds are achieved. In the course of recent months, we have adopted both organizational and strategic measures to strengthen the collections and the brand presence in order to make them more attractive for international markets and consumers too in future. The implementation of these measures is not, however, expected to have a perceptible effect until 2017 and the business years after that.”
As a whole, Calida Group profit in the first half was 693,000 Swiss francs (about $708,000) on sales of 168.1 million Swiss francs (about $171.8 million) compared to a profit of 5.2 million Swiss francs (about $5.3 million) on sales of 197.4 million Swiss francs (about $201.7 million) in the first six months of 2014.
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