Witnessing profit decline, Gerry Weber to follow ‘Fit4Growth’

In the past financial year 2014/15 from November 1, 2014 to October 31, 2015, consolidated sales revenues of Gerry Weber International amounted to 920.8 million euros (1,017.8 million dollars), while earnings before EBIT totaled 79.3 million euros (87.6 million dollars). The company will propose a dividend of 0.40 euros (0.44 dollars) per share at the upcoming Annual General Meeting. The company also plans to announce initiatives aimed at realigning the Group.

Sales revenues increase in 2014/15

Although sales revenues increased by 8.1percent for the financial year 2014/15, the company said it was not a satisfactory year for the Gerry Weber Group. While the Hallhuber subsidiary, which was acquired in February 2015, delivered a positive performance, the sales revenues generated by the core brands –Gerry Weber, Taifun and Samoon declined by 5.4 percent.

The breakdown by segments shows that the core retail segment reported 8.7 percent increase on the previous year is attributable to the segment’s ongoing expansion. The increase primarily reflects the opening of new company-managed stores and the reclassification of former shop-in-shops operated by the wholesale segment to the retail segment. However, like-for-like revenues declined by 4.4 percent, reflection of the general negative trend in the German market, which contracted by 2 percent.

Sales revenues of the wholesale segment were down by as much as 18.3 percent on the previous year because of lower order volumes placed by wholesale customers and a shift in wholesale revenues to the retail segment. Hallhuber contributed 115.2 million euros (127.3 million dollars) to the Group’s total sales revenues. Compared to the prior year period, its revenues increased by 18 percent supported both by the newly opened points of sale and by like-for-like revenues growth of 3.2 percent.

Announces ‘FIT4GROWTH’, outlook

Eyeing profitable long-term growth in the next 18 to 24 months, the Group announced a programme comprising of four elements: optimise the retail operations; adjust structures and processes; strengthen the wholesale operations; and modernise the brands. The measures presented will work on three levers, namely sales revenues, efficiency and costs as well as gross profit.

The Managing Board expects the Group to complete the realignment programme in the next 18 to 24 months and to enter a phase of sustainable profitable growth as of the third year. In view of the implementation of the programme, the Managing Board projects severe cuts on the revenue and earnings side of the Gerry Weber core segment and, hence, for the Group as a whole.

The Managing Board therefore projects consolidated sales revenues of between 890 euros and 920 million euros (984-1,017 million dollars) for the financial year 2015/16, of which Hallhuber will contribute 180 euros to 190 million euros (199-210 million dollars).