Q2 sales and profit down at RNB Retail, applies for restructuring of its subsidiaries

In its interim report for the second quarter and first six months, RNB Retail said reported net sales for the group were 561 million Swedish krona (54 million dollars) compared to 604 million Swedish krona in the second quarter. For comparable units in Sweden, sales were down 9.4 percent compared to positive 1.5 percent previous year, and for all national markets, sales decreased by 11.6 percent compared to positive 2.2 percent. The group’s gross margin decreased to 43 percent. Operating income for the quarter was negative 52 million Swedish krona (4.9 million dollars)compared to negative 28 million Swedish krona, while profit after tax amounted to negative 63 million Swedish krona (6 million dollars) against negative 35 million Swedish krona.

In a separate release, the company said that it has applied for company reorganization for the subsidiaries Departments & Stores, Polarn O. Pyret and Brothers at the Stockholm District Court due to liquidity crisis as a direct consequence of COVID-19. The company said, reorganizations are necessary to give the companies short-term ability to get through the extreme COVID-19 situation, and in the long-term, give the Companies the time needed to find a financial solution. These Companies will also implement operational and organizational changes.

“Visitors to our stores, particularly Departments & Stores, significantly decreased in March as a result of the Covid-19 pandemic. There is no doubt that it will negatively impact sales and profit in the third quarter. As a direct result of the global Covid-19 pandemic, we today filed for company reorganisation for the subsidiaries Brothers AB, Departments & Stores Europe AB and Polarn O. Pyret AB. The decision was based on the liquidity crisis that is expected as a direct result of the pandemic,” said Kristian Lustin, the company’s President and CEO in a statement.

RNB Retail’s performance in the first half

Reported net sales for the group were 1,134 million Swedish krona (108.7 million dollars) compared to 1,203 million Swedish krona in the first six months. The company said, for comparable units in Sweden, sales were down 8.9 percent compared to up 2 percent in the previous year, and for all national markets sales decreased by 10.3 percent compared to rise of 2.3 percent last year, while expressed in SEK.

The group’s gross margin decreased to 48.3 percent compared to 50.1 percent in the period, with the business areas Man of a kind increasing its margins. Margins decreased in the three other business area. Operating income, excluding restructuring costs and IFRS 16, amounted to negative 35 million Swedish krona (3.3 million dollars) compared to 24 million Swedish krona. Operating income was negative 40 million Swedish krona (3.8 million dollars), while profit after tax amounted to negative 67 million Swedish krona (6.4 million dollars) compared to negative 9 million Swedish krona.

Performance of business segments under RNB Retail

The company added that net sales in the Brothers business area totalled 118 million Swedish krona compared to 125 million Swedish krona in the second quarter, while sales in comparable stores in Sweden and Finland decreased by 6.7 percent expressed in SEK. E-commerce increased in the quarter, while net sales from franchise stores were down in the quarter compared to the corresponding period in the previous year, mainly due to a decrease in the number of franchise stores. Total brand sales were 565 million Swedish krona compared to 601 million Swedish krona on a rolling 12-month basis. In the first half, net sales totalled 235 million Swedish krona compared to 258 million Swedish krona, while sales in comparable stores in Sweden and Finland decreased by 9.1 percent expressed in SEK.

Net sales in the Departments & Stores business, RNB Retail said, were 248 million Swedish krona, a decrease of 1.9 percent in the second quarter and were 482 million Swedish krona, up 0.8 percent in the first half period

Net sales in the Man of a kind business area were 7 million Swedish krona compared to 6 million Swedish krona and gross margin was significantly higher compared to the corresponding quarter in the previous year due to a focus on full price, news and brands. In the first half, net sales in the Man of a kind business area increased to 15 million Swedish krona compared to 12 million Swedish krona.

At Polarn O. Pyret, second quarter net sales totalled 188 million Swedish krona with sales in comparable proprietary stores on all national markets decreasing by 16.4 percent, expressed in SEK. Brand sales were 854 million Swedish krona compared to 934 million Swedish krona on a rolling 12-month basis. Net sales in the first six months totalled 402 million Swedish krona with sales in comparable proprietary stores on all national markets decreasing by 14.7 percent year-on-year, expressed in SEK.

Picture:Facebook/Man of a Kind