German menswear group Ahlers struggles in first half of 2017-18 after loss of two major clients
As was expected, the first six months of the 2017-18 financial year were less than exciting for German men’s ready-to-wear group Ahlers. Despite growth in the denim category, up 2.8% driven by Pierre Cardin and Pioneer Authentic Jeans, the German group’s revenue between December 2017 and May 2018 fell by 5.5%, to €110.8 million.
Ahlers explained that the shortfall was due to poor results in the ‘suits’ and ‘overcoats’ categories, as well as to order cancellations by two major East European clients, generating a revenue loss of €1.8 million. In Russia, where the group set up a joint-venture company in the first quarter, and in Ukraine, Ahlers did post a slight sales increase of €0.2 million with its other clients, but it wasn’t enough to compensate for the loss. The group’s overall sales therefore fell by €1.6 million compared to the same period in the previous year, and its profitability also took a hit.
In the first six months of the financial year, EBITDA lost 35.7%, and was worth €2.7 million. To steady the course, Ahlers has implemented several cost-reduction measures, notably in the area of logistics, where it is trying to make operations smoother and faster.
Keeping costs under control will nevertheless remain a priority in the second half of the financial year. Chiefly, Ahlers is looking to cut procurement costs in order to improve its margins. For the second half of the financial year, the senior management of the Herford-based group is targeting a shortfall of no more than €1 million compared to the result of 2017.
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