2014: Sales Decline Accelerates at Intimacy

Sales (when measured in U.S. dollars) fell 14.1% at the retail chain Intimacy in the first half of 2014, while at the international parent company, Van de Velde, sales rose 10.3%. The Belgium-based lingerie wholesaler and retailer added, in a financial release, that at Intimacy “Due to the weakening of the U.S. dollar against the euro the fall in euro is a little larger.” 22.7%, in fact.

In 2013 sales at Intimacy had fallen by over 12% and by a similar amount in 2012 according to earlier releases from its parent. Van de Veld took a stake in Intimacy in 2007 and had expanded that to full management control and ownership of most of the company by mid-2012. All along Van de Velde promised that a combination of its own retail expertise and increasing the percentage of Van de Velde’s own products (the company owns the Marie Jo, PrimaDonna and Andres Sarda brands) in the stores would turn things around. That has not happened. The percentage decline in sales at Intimacy accelerated in the first half of 2014.

In its most recent report, Van de Velde noted, “The impact in the carrying value of the intangible assets with regard to Intimacy will be examined during the half-year closing. Based on the results of the first half of the year, there is a reasonable probability of an important impairment. This impairment is a non-cash charge and accordingly has no impact on the cash flow.”

Meanwhile, things at the rest of the company are doing much better. “Consolidated turnover at Van de Velde in the first half of 2014 rose by 10.3% (from €97.0m to €106.9m).” the company reported. “On a like-for-like basis (including comparable deliveries), consolidated turnover is up 9.1%. This turnover growth consists of the following components:

1. 13.8% growth in wholesale turnover:

a. This growth is driven by the very successful launch of PrimaDonna Swim and the strong growth in lingerie. Follow-up orders in May and June were also higher than during the same period in the previous year. As a result, actual growth is much higher than the minimum growth of 8.0% stated earlier.

b. Pre-orders for the second half of the year are higher than the same period in the previous year. The rise is of course lower than in the first half of the year because of the absence of the swimwear factor.”

Van de Velde also cited additional positive factors in its sales growth. “In continental Europe retail turnover at Rigby & Peller rose by 12.6%, especially due to strong like-for-like growth in Germany (18.9%). Retail’s footprint is increasingly concentrated on Northern Europe (openings in Denmark, franchising in the Netherlands, closures in France and Spain).”

The firm also explained “Retail turnover at Rigby & Peller in the United Kingdom rose by 9.1% (3.9% on a like-for-like basis) in local currency. Due to the strengthening of the UK pound against the euro the rise in euros is higher.” And it reported that “Retail turnover at the former Donker stores contributes €2.4m (compared with €1.3m for April-June 2013). Turnover at the former Donker stores rose by 13.7% on a like-for-like basis.”