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Gerry Weber FY16 turnover declines 2.2 percent, cuts 200 jobs

By Prachi Singh

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Management

Confirming its preliminary figures for the past financial year 2015/16 published at the end of January 2017, Gerry Weber International said the company’s sales revenues of 900.8 million euros (949 million dollars) for the year declined 2.2 percent. As a part of its Fit4Growth initiative, the company reduced the headcount by cutting around 200 jobs at the headquarters in Halle/Westphalia.

Commenting on the results, Ralf Weber, CEO of Gerry Weber International said in a press release, “The Gerry Weber Group closed the financial year 2015/16 according to plan and met its forecast in spite of the continued difficult market environment and the extraordinary expenses resulting from the realignment programme. This year will not be easier but our realignment programme is proceeding according to plan and making good progress.”

Core brands revenue declined by10.9 percent

Core brands Gerry Weber, Taifun and Samoon contributed 717.6 million euros (757 million dollars) and Hallhuber contributed 183.2 million euros (193 million dollars) to total group revenues. The 10.9 percent decline in core brand revenues, the company said, were not fully offset by the gratifying 17.7 percent increase in Hallhuber’s revenues.

Sales revenues of the Gerry Weber core segment were down by 10.9 percent on the previous year, which is attributable to a reduction of both core retail and wholesale revenues. The decline in core retail revenues, Gerry Weber said, was attributable not only to the 75 stores closed in the context of the Fit4Growth programme but mainly also to the 7.6 percent drop in like-for-like revenues. Sales revenues of the wholesale segment fell by 18.3 percent affected by the continued difficult market environment. By contrast, the online business of Hallhuber and Gerry Weber showed a positive trend, with total online revenues rising by approximately 22 percent on the previous year.

The company’s EBITDA was 77.3 million euros (81 million dollars) and EBIT was 13.8 million euros (14 million dollars). The company’s managing board and the supervisory board have decided to propose a dividend of 0.25 euros (0.26 dollar) per share to the next Annual General Meeting.

Fit4Growth programme to continue in the new fiscal

In the first year of the Fit4Growth programme, the company said, 75 of the planned 103 stores of the Gerry Weber, Taifun and Samoon brands were closed. The remaining stores will be closed as planned by mid-2017. The group will further expand and accelerate its digitalisation activities in the current financial year with the re-launch of the Gerry Weber online shop in spring 2017. The re-launch of the Hallhuber online shop will follow in autumn 2017.

Through the launch of the new Talkabout brand exclusively for the wholesale segment, the company is strengthening the wholesale operations. The collections have been developed jointly with the wholesale partners and were tested in 30 shop-in-shops in the past financial year 2015/16. Due to the positive feedback, the number of Talkabout sales spaces will be increased to 120 to 150 shop-in-shops in the current financial year 2016/17.

Expects store closures to impact 2016/17 sales

The managing board projects the resulting special charges to amount to approx. 6 million euros (6.33 million dollars) in the current financial year, compared to 31.2 million euros (32 million dollars) in the previous year. Against this background, the board does not expect earnings to increase significantly in FY 2016/17 and projects consolidated EBIT of between 10 and 20 million euros (10.5 to 21 million dollars) for the current financial year. Consolidated EBITDA reported is expected to come in at between EUR 60 and 70 million euros (63 to 73 million dollars).

As a result of the store closures and the continued difficult market environment, the board expects sales revenues in 2016/17 to decline by a moderate 2 percent to 4 percent compared to the previous year. As announced in February 2016, the Gerry Weber Group expects to enter a phase of sustainable profitable growth in the third year following the start of the realignment exercise, i.e. in the financial year 2017/18.

Summing up

Revenues down 900.8 mn euros
Core brands revenues dip 717.6 mn euros
  • As a result of the store closures and the continued difficult market environment, the board expects sales revenues in 2016/17 to decline by 2 percent to 4 percent.

Picture:Facebook/Gerry Weber

gerry weber international