Wolford: modest growth thanks to exchange rate effects
The net rebound expected by Wolford shareholders has not occurred in the 2015-16 fiscal year, closed on 30th April, in which a promising start was tarnished by the performance in the second half of the year. The Austrian high-end hosiery and lingerie specialist did manage to post a little growth, generating a 3.2% rise in revenue and reaching €162.4 million, but this was due above all to positive exchange rate effects.
Without them, Wolford sales remained stable compared to the previous fiscal year. 2015-16 started out positively, but was marred by a disappointing year-end festivity period. The third quarter too recorded a significant decrease (-7% compared to the February-March-April 2015 period). Specifically, the wholesale business fell again by 2%, while direct sales (via subsidiaries and licences) rose instead by 2%.
Among Wolford's regions, Spain and Italy confirmed their fine performance (+12 and +8% respectively), while the Netherlands (+5%), Scandinavia (+3%) and Belgium (+3%) also made a good showing. Wolford is growing in Asia too, its 16% revenue increase generated chiefly by the wholesale channel.
Three other countries enjoyed significant growth although, as noted above, this was due to exchange rate effects: the USA (+12%), the UK (+8%) and Switzerland (+10%).
However, three countries which are historically crucial for the brand suffered slumping sales: they were Austria (-2%), Germany (-4%) and France (-3%). Eastern Europe too has proven tough for Wolford, posting a 4% decrease in sales.
More bad news for the Austrian company: last year it bounced back into profitability, but it recorded significant losses in the 2015-16 fiscal year. While EBIT is in fact still in the black, at €1.55 million (-29%), payment of deferred taxes has caused Wolford to record terminal losses to the tune of €6.19 million.
As for the fiscal year which has just begun, Wolford's management hopes to achieve a small growth in both revenue and EBIT, though initial results are lacklustre, notably due to negative retail performances in Europe.
To energise the current fiscal year, the company announced further reductions in costs and the investment on a new store concept, featuring a re-designed brand image, which will be introduced next September in Berlin, Shanghai and Los Angeles.
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