IC Companys’ first half-year full of contrasts
today Feb 6, 2014
A mixed picture — that's what IC Companys has to offer after the first six months of its fiscal year. For the period ending December 31, the Danish group's first half of the staggered fiscal year saw sales fall by 1% to 1.775 billion Danish krone or 238 million euros. This overall figure factors in the various fortunes of the group's brand segments. The mid-range segment, currently undergoing a restructure, is still suffering. The outdoor Peak Performance brand remained stable, while premium ready-to-wear brands By Malene Birger and Tiger of Sweden enjoyed double-digit growth.
The group's leader, Peak Performance and the only brand in the outdoor segment, apparently struggled with the too warm winter in Northern Europe, which accounts for 69% of its sales. IC Companys hopes to do better than this stable first six months or even the slight decline of 1.2% compared to the same period last year. 70% of the 76 million euros in sales came from wholesale business and franchising, an increase of 3.5%.
The bad news came from retail with a decline of 7.5%. Even the group's most profitable brand Peak Performance slightly declined by 1% in operating profit, down to 12 million euros.
The other two premium brands, By Malene Birger women's wear and the mixed line Tiger of Sweden, fared much better. The premium segment these two lines comprise enjoyed increased sales of 12% for the half-year, reaching 79 million euros. The growth was driven by retail expansion and more international business, but the product is also a factor, given that sales already grew 8.4% for the same period last year. The group also welcomed the successful launch of an accessories range for Tiger of Sweden, which also just signed two new distribution deals covering France and the United States. Wholesale for this segment grew by 16%, compared to retail growth of 5.5%. As a result, the company's operating income increased 8% to 7.8 million euros.
Once again, the mid-range segment dragged down results of the first half of IC Companys' fiscal year. This market slot only now has four brands left — InWear, Matinique, Part Two and Soaked in Luxury, following the group's announcement to separate the women's wear brands Saint Tropez and Designers Remix from the grouping. Having already sold Jackpot and Cottonfield in 2013, IC Companys is starting a process of selling off Saint Tropez and is pondering the financial future of Designers Remix in which it is only co-shareholder.
The company's mid-range is undergoing a full restructuring and looking for synergies between its four remaining brands. Here too, segment sales decreased, this time nearly 16% or 53 million euros. While wholesale was down 19%, retail posted a decline of 12%, but only 1.6% less on a comparable basis. Basically shop closings pushed down sales for the reporting period, but these cost reductions have nearly doubled the company's operating income, from 1.5 million to 2.8 million euros.
All this combined, the operating profit of the group increased by 6% to 25 million for the first half-year. For the full year, IC Companys management hopes overall sales will remain stable but with higher profits.
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