Scotch & Soda manages to book profit in FY15/16

Scotch & Soda has returned to profitability this fiscal year after reporting heavy losses in the year 2014/15. According to the recently filed annual report, the Amsterdam-based apparel company achieved 1.1 million euros (1.09 million dollars) profit for the year June 1, 2015 to May 31, 2016.

Scotch & Soda’s return to the black comes after the company reported losses amounting to 73.9 million euros (81 million dollars) for its fiscal year 2014/2015. Sales for the fiscal year 2015/2016 rose by 5.7 percent to 325.9 million euros (357.8 million dollars). However, the company’s wholesale results were still disappointing, even though they are said to account for 65 percent of the company’s total turnover. The wholesale turnover decreased by 7 percent to 213.3 million euros (234.2 million dollars). The company attributed the decline in wholesale to ‘the difficult market conditions, with retailers being more cautious in placing orders’, according to Retailnews. On the other hand, retail sales fared well to jump 33 percent to 74.3 million euros (81.5 million dollars).

Scotch & Soda reports slight rise in profit

In fiscal year 2015/2016, the Dutch fashion brand opened 18 stores, and took direct control over seven franchise stores in France, bringing the global store count to a total of 79. The brand is sold in 8,000 outlets worldwide. E-commerce reported a positive momentum, with sales increasing 57 percent to 38.4 million euros (42.1 million dollars).

The total turnover in 2015/2016 amounted to 325.9 million euros (357.8 million dollars) against 308.5 million euros (338 million dollars). EBITDA declined by 3.8 percent to 37.8 million euros (41.5 million dollars). In January 2016 Scotch & Soda reported a loss of 74 million euros (81.2 million dollars). The annual report submitted to the Dutch Chamber of Commerce showed that the company has a capital of less than 60 million euros (65 million dollars) and it has a debt of nearly 270 million euros (296 million dollars) including a 6 percent interest rate, which has to be paid to Sun Capital, the private equity firm had acquired Scotch & Soda in 2013 for 350 million euros (384 million dollars).

"It is indeed going well at Scotch & Soda. We are pleased with the result achieved during the past financial year. We continue to work hard on our revenue growth and margins, where we mainly focus on EBITDA. The driving force behind the strong performance of Scotch & Soda is our collection. The launch of our first brand campaign and the presentation of the SS17 collection during New York Fashion Week are highlights of the last period that we look back on with pride,” said Dirk Jan Stoppelenburg, CEO of Scotch & Soda to FashionUnited.

In January 2016, Scotch & Soda reported another loss of 74 million euros (81 million dollars) according to the reports filed at the Chamber of Commerce. The company continues to heavily rely upon its loss-making wholesale business. With the un-favourable economic situation in Europe in 2015, the company said that rise in sales was not enough to offset the losses in the wholesale.

Picture:Scotch & Soda