Ahlers to cut 130 jobs as part of the company's turnaround plan

Ahlers Ag said through a statement that the declining sales of suits and jackets continued in Q3 2017/18 from June to August, which resulted in the Group’s sales revenues in the first nine months of the current fiscal year falling by a total of 11.7 million euros (13.4 million dollars) or 6.5 percent to 168 million euros (192.9 million dollars). On September 13, 2018, the company announced a comprehensive set of measures, which include increased focus on Ahlers’ core brands Baldessarini, Pierre Cardin und Pioneer, streamlining of the organisation and a reduction in complexity. The full set of measures, Ahlers added, will lead to about 130 job reductions, including around 100 in Germany.

Commenting on the measures, Dr. Stella A. Ahlers, CEO of Ahlers AG, said in a statement: “The aim is to make the company future-proof and sustainably profitable in a strongly changing market environment. The sportswear activities by the Jupiter brand will be discontinued after distribution of the 2019 winter season. Moreover, Ahlers will focus on menswear fashion in the future and discontinues the woman activities by Pierre Cardin and Pioneer Authentic Jeans and parts of the logistic operations will be relocated to Poland after mid-2019.”

Ahlers posts decline in revenues

Influenced by casualisation and consistently high summer temperatures, the company said falling revenue trend sent sales falling by 7.2 million euros. The company further added that with deliveries more effectively adjusted to the season and consignment business on the increase, revenues in an additional amount of 1.6 million euros were shifted from the third to the fourth quarter of 2017/18, while sales were also dampened by the difficult market situation in Russia and Ukraine. Revenues in these markets declined by around 22 percent.

However, Pierre Cardin recorded slightly higher jeans sales, with revenues up by 1.2 percent. Pioneer Authentic Jeans achieved sales on a par with the previous year and was particularly successful in the home market, were revenues picked up by 1 percent. Sales revenues in the company’s own retail segment increased by 2.1 percent in the first nine months of the fiscal year 2017/18 due to the takeover of Russian stores by Ahlers RUS.

The company said that the drop in revenues was the main reason why gross profit fell by 7.1 million euros (8.1 million dollars) or 7.7 percent from to 85.6 million euros (98.3 million dollars). Consolidated earnings after taxes declined by 3.9 million euros to 0.2 million euros (0.23 million dollars) in the first nine months of 2017/18 due to the lower revenues.

Ahlers expects better revenue trend for FY17/18

The Ahlers management board expects the revenue trend for the full year 2017/18 to be slightly better in percentage terms than for the first nine months. EBIT before one-time effects are expected to be slightly negative compared to previous year’s 3.5 million euros (4 million dollars) due to the impact of lower revenues on gross profit. Due to the result of the fiscal year 2017/18, the company added that it will probably not pay out a dividend.

Picture credit: Ahlers