Charles Vögele FY’12 net sales down 4.4 percent

European fashion company Charles Vögele Group’s net sales

fell down 4.4 percent from 1,016 million Swiss Francs (1,090 million dollars) to 972 million Swiss Francs (1,042 million dollars) in the financial year 2012. Operating earnings before depreciation and amortization (EBITDA) improved slightly on the prior year, by 4 million Swiss Francs (4.2 million dollars) to 17 million Swiss Francs (18.2 million dollars). Impairments in the East European businesses, Belgium and the Netherlands once again weighed down operating earnings (EBIT). Though it was slightly better than in 2011, EBIT for 2012 was still negative at 99 million Swiss Francs (106 million dollars).

The 2012 financial year was a challenging one for the whole retail sector. Subdued consumer sentiment, plus the unsettling effect of the euro crisis and excessive government debt, especially in Southern European countries, affected business in all of Charles Vögele’s sales regions. In addition, the price erosion evident for many years continued. From the operational point of view, the main themes for Charles Vögele Group in 2012 were cash management and the rigorous implementation and optimization of core business-specific activities.
During the first quarter, the weak Euro once again had a negative effect. 16 million Swiss Francs (17.1 million dollars) of the decline in sales was due to the depreciation of foreign currencies (mainly the Euro) against the Swiss franc. In local currency terms the fall was 2.8 percent. The gross profit margin improved slightly, from 61.5percent in the prior year to 61.9 percent owing to incoming margins and smaller price reductions in the second half of the year. More intense discounting activity in the first half of 2012 led to a decline in gross profit.

In autumn 2012 Charles Vögele launched an original, people-oriented brand campaign in its Swiss home market. Under the motto ‘Advising you with style’ the campaign centred on the advisory and fashion expertise of Charles Vögele’s employees. In TV and print ads, five local clubs and associations from around Switzerland were given fashion advice by Charles Vögele staff and dressed in stylish new outfits. The aim of the campaign is to increase customers’ confidence in the brand. The advert was voted the second best TV ad of 2012, reflecting how well it has been received in Switzerland. Dirk Lessing, Member of the Board of Directors since April 2012, has decided not to stand for re-election at the 2013 Annual Shareholders’ Meeting. By generating positive free cash flow in 2012 Charles Vögele has successfully negotiated the first hurdle on the way back to sustainable profitability. In order to deliver a much improved result for the company in the 2013 financial year, the management-team has developed a comprehensive turnaround concept with the support of external specialists. In parallel to the Group Management being strengthened by the addition of a Chief Sales Officer and a Chief Purchasing Officer, immediate sales-oriented measures and additional cost potentials are evaluated.