(Filed Under Financial and General Interest News). Wolford’s CEO has resigned as of the end of July, this following a huge loss in its 2015/2016 year, smaller losses in 2012/13 and 2013/14, and the recent decision by the firm’s main shareholder group to seek a buyer for its majority stake in the company.
The company also announced that its banks have extended its lines of credit “up until June 30, 2018 as well as [having been] granted bridge financing of up to € 10 million to cover its peak seasonal liquidity requirements,” thus securing financing “for the current financial year (May 2017 – April 2018).”
The company announced Ashish Sensarma, CEO since January 2015, is leaving July 31, and that Axel Dreher, the current deputy CEO “will also assume management responsibility for strategy, marketing and sales as of August 1, 2017,” as well as “continue to carry out his duties as COO.” In addition, Brigitte Kurz, the current director of the finance department, has been named CFO and “will also be in charge of human resources, IT, legal affairs and investor relations.”
The high end, Austria-based lingerie, hosiery and apparel maker, reported a deficit of 6.19 million euros in fiscal 2016, and a projected “operating loss” of between 8.0 and 10.0 million euros for the latest fiscal year, which ended April 30, 2016. (The most recent loss translates to approximately $8.7 million to $10.9 million at current exchange rates). The company recently announced earlier this month that it was postponing "the presentation of the annual financial statements and consolidated financial statements and the annual results press conference" from July 14, 2017 to August 24, 2017.
Wolfed explained that “Ashish Sensarma will remain with the company in an advisory capacity in the upcoming months with respect to the process of addressing potential investors, which is already underway.”
According to a brief statement June 9, “The main shareholder group of Wolford AG, WMP Familien-Privatstiftung, Sesam Privatstiftung and its subsidiary the “M. Erthal & Co.” Beteiligungsgesellschaft m.b.H., as well as related parties announced today the intention to sell their stake, which is a majority stake, in Wolford AG. To this end, the shareholders are starting a process, which is supported by Deloitte Financial Advisory GmbH, for the selection of interested parties. Wolford AG will join this selection process. The purchase of the majority stake by a future core shareholder shall be combined with an equity financing transaction that shall strengthen the company’s liquidity on a long-term basis. The issue size has not yet been determined. Wolford is negotiating with the financing banks in order to secure the financing to meet the liquidity requirements up to that time.”
In North America (where according to recent records the company maintains 36 of its approximately 270 worldwide retail locations, as well as a wholesale business) sales for the most recent nine months fell to €23.386 million (about $25 million) from €24.975 million in the previous nine months. EBIT (earnings before interest and taxes) fell to a loss of €1.276 million for the period, from a smaller loss of €415,000 in the prior year. Interestingly the average number of employees in North America rose from 98 to 108 in the most recent nine months. The number of stores on the continent has remained unchanged from last year.
For the company as a whole, “Wolford-owned retail stores reported a drop in revenue of €5.46 million (-6.6 %), as did the wholesale business, where revenue was down by €3.48 million (-7.3%) compared to the first nine months of the previous financial year. In contrast, Wolford’s own online business expanded once again with total revenue in the first nine months of 2016/17 at €0.43 million or a 4.4 % rise from the prior-year level.” — NM
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