Gerry Weber to realign amid challenging market conditions

According to preliminary figures for the past financial year 2014/15 from November 1, 2014 to October 31, 2015, Gerry Weber International generated sales revenues of 920 million euros (999.2 million dollars) and EBIT of 79 million euros (85.7 million dollars). The company said, revenues and earnings are in line with the market expectations.

Against the background of the unsatisfactory business performance of the past months and the continued challenging market environment for the fashion industry, the Managing Board of the company has decided to launch a programme to realign the Group.

Hallhuber acquisition supports revenue growth

The Hallhuber subsidiary acquired in February 2015 contributed 115 million euros (124.8 million dollars) to Group revenues. The increase in revenues, Gerry Weber said, is attributable not only to the newly opened company-managed stores but also to like-for-like sales, which rose by 3.2 percent. Since the acquisition, Hallhuber has opened 57 new sales floor spaces and operated a total of 275 company-managed points of sale as of October 31, 2015.

Sales revenues of the company’s core brands – Gerry Weber, Taifun and Samoon were down approximately 5.4 percent on the previous year 2013/14. Due to the increased sales space, the Gerry Weber Core Retail segment (excluding Hallhuber) reported around 8.7 percent growth on the previous year. However, like-for-like sales declined by 4.4 percent, which the company said was in line with the general negative market trend in Germany. Like-for-like sales of the German fashion retail sector decreased by around 2 percent in the financial year of Gerry Weber.

Decline in EBITDA and EBIT

The Group’s EBITDA dropped from 134.2 million euros (145.7 million dollars) in the previous year to 115 million euros. Hallhuber contributed 10 million euros (10.8 million dollars) to the Group‘s EBITDA.

The reduction in the Group’s EBIT, the company said was primarily attributable to the decline in high-margin wholesale revenues and the Gerry Weber Core Retail segment’s lower like-for-like sales. Also, the initial consolidation of Hallhuber had an adverse impact on the EBIT margin, so the Group’s EBIT margin declined from 12.8 percent to about 8.6 percent.