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Gerry Weber H1 sales improve by 2.5 percent

By Prachi Singh

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Business |REPORT

The Gerry Weber Group said that its performance in the first half of 2015/16 from November 2015 to April 2016 was in line with expectations. Sales grew by 2.5 percent to 443.6 million euros (500.2 million dollars). The company’s core brands Gerry Weber, Taifun and Samoon contributed 352 million euros (397 million dollars) compared to 398.9 million euros (449.7 million dollars) in the first half of the previous year, to consolidated sales revenues.

Commenting on the first half performance, Ralf Weber, CEO of Gerry Weber International, said, “The implementation of our “Fit4Growth” realignment programme is progressing well and as planned. The first 21 out of the total 103 closures have already been completed, the social compensation plan for the retail segment and for the administrative support functions in the head office has been signed and our gross margin has started to improve as a result of our optimised merchandise and inventory management system. Even so, we still have numerous tasks and a difficult path ahead of us during this and the next financial year.”

Retail expansion boosts sales by 2.5 percent

The core retail segment contributed 206.4 million euros (232.7 million dollars) to consolidated sales revenues. The company said that 2.5 percent year-on-year increase reflects the opening of new sales spaces during the period. Like-for-like sales were down by 6.7 percent year-on-year, reflecting the negative market trend as well as changes to the merchandise and inventory management systems under the “Fit4Growth” realignment programme.

Compared to the first half of the prior year, core wholesale revenues shrank by 26.3 percent to 145.6 million euros (164.1 million dollars). However, the gross margin for both retail and wholesale improved from 58.5 percent to 60.9 percent. The company said that the Hallhuber subsidiary continued to develop positively. It generated sales of 91.7 million euros (103.4 million dollars), up 22.9 percent year on year. Growth was supported not only by new store openings but also by a 6.3 percent advance in like-for-like sales.

First half earnings witness a decline

Gerry Weber said that due to the decline in high-margin core sales, continuing high fixed costs and the expansion-related expenses incurred by Hallhuber subsidiary, consolidated EBITDA declined from 52.5 million euros (59.1 million dollars) to 29.9 million euros (33.6 million dollars). Hallhuber’s contribution to Group EBITDA amounted to 6.6 million euros (7.4 million dollars). Accordingly, EBIT for the first half dropped to 8.4 million euros (9.4 million dollars).

In view of the business performance in the first half of 2015/16, the company is upholding its full year guidance. The Managing Board expects to report consolidated 2015/16 sales between 890 euros and 920 million euros (1,002 and 1,036 million dollars), with Hallhuber contributing between 180 euros and 190 million euros (202 and 214 million dollars). Group EBIT are anticipated to come in between 10 and 20 million euros (11 and 22 million dollars).

picture:hallhuber.com

Gerry Weber
gerry weber international