Marimekko rides a strong wave in Q3, cites flagships as key to success
today Nov 1, 2018
Marimekko appears to have had a good Q3 with the textile design, fashion and lifestyle specialist saying its net sales rose 10% and comparable operating profit was up as much as 44%. And while the Q3 sales figure still represented a slowdown compared to the first half, the firm’s CEO said the quarter was “exceptionally strong” so we have to assume that a Q3 deceleration is a regular occurrence.
In the three-month period to September 30, net sales reached €29.8 million with growth generated primarily by retail and wholesale turnover in Finland and by wholesale in the Asia-Pacific region. Finnish wholesale rose mainly due to non-recurring promotional deliveries, and while last year, the period’s net sales in the Asia-Pacific region had been boosted by royalties, there were none this year, which makes the 2018 performance look even more impressive.
Operating profit reached €6.2 million and comparable operating profit was €6.3 million with earnings boosted by that sales growth. The results were also helped by an increase in the sales margin, but lower royalties and higher fixed costs than in the comparison period dragged down the result somewhat.
YEAR TO DATE
As mentioned, sales growth was slower in Q3 than in the first half, which meant that the first nine months of the year saw net sales rising 13% to €82.1 million. Sales rose in all market areas with retail sales growth of 11% and wholesale growth of 26% in Finland. In the Asia-Pacific region, wholesale rose by 20%.
Operating profit surged to €16.5 million from €10.6 million, boosted by higher sales, particularly in Finland and the Asia-Pacific region, but dented by a decline in the relative sales margin, largely due to wholesale accounting for a higher proportion of net sales than in the comparison period.
CEO Tiina Alahuhta-Kasko said: “The third quarter was exceptionally strong, as expected. We can be very pleased with our recent progress, and this is a good basis for continuing our long-term work by which we seek markedly stronger growth than before.
“One of the main events of the period under review was the reopening at the end of August of the Marimekko flagship store in the popular Omotesando district of Tokyo after a total makeover. Our Sydney flagship store is currently undergoing a revamp, and it will open in a new location around mid-November. Earlier this year we also revamped our flagship store in Stockholm. These investments in the store network are important as the flagship stores play a central role as the embodiment of our brand in the world.”
And the exec added that in China, it will enhance its investment in marketing and in raising its brand profile. Its aim is to start online selling of Marimekko products there.
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