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Hosiery/​Seamless

Strong sales lift profits at Wolford

Innovative Austrian hosiery and lingerie manufacturing brand Wolford posted a strong third quarter 2010/11, continuing the positive trend of the first two quarters. Sales at the international fashion company in the first nine months of the current fiscal year (May 1, 2010 – January 31, 2011) rose by 6.6% to EUR 120.0 million, but operating performance indicators developed even more gratifyingly, with profit from continuing operations improving by 93% on the previous year

8th April 2011

Knitting Industry
 |  Bregenz

Hosiery/​Socks

Innovative Austrian hosiery and lingerie manufacturing brand Wolford posted a strong third quarter 2010/11, continuing the positive trend of the first two quarters.

Innovative Austrian hosiery and lingerie manufacturing brand Wolford posted a strong third quarter 2010/11, continuing the positive trend of the first two quarters.

Sales at the international fashion company in the first nine months of the current fiscal year (May 1, 2010 – January 31, 2011) rose by 6.6% to EUR 120.0 million, but operating performance indicators developed even more gratifyingly, with profit from continuing operations improving by 93% on the previous year, from EUR 4.6 million to EUR 8.9 million.

“We have been able to significantly increase sales in almost all markets and distribution channels for five straight quarters. At the same time, we expanded monobrand distribution to comprise more than 60 percent of total sales. This shows that our strategy of continually improving distribution quality and focusing on Wolford-controlled distribution has had a sustainably positive impact”, comments Holger Dahmen, Chief Executive Officer of Wolford.

“The considerably improved operating performance indicators and the net profit for the period, which we came close to doubling, reflect sales growth but are also the logical result of consistently implemented cost reduction and efficiency improvement measures, which we will continue to work on in the future as well,” Holger Dahmen concludes.

Ongoing earnings improvement and disproportionately high increases in all relevant earnings indicators

On balance, total sales of the Wolford Group rose 6.6% in the first three quarters of the 2010/11 fiscal year, amounting to EUR 120.0 million (Q1-Q3 2009/10: EUR 112.6 million). The company says this development can primarily be attributed to the performance of its proprietary stores, which raised sales by 14.1% during the period under review.

The positive development of key earnings indicators was even more pronounced in the reporting period, posting above-average growth compared to the rise in sales. Accordingly, EBITDA at the Wolford Group amounted to EUR 15.9 million, representing an increase of 31% from the level of EUR 12.1 million in the first nine months of 2009/10.

The corresponding EBITDA margin improved to 13.2% (Q1-Q3 2009/10: 10.8 percent). The increase in the operating profit (EBIT) was even more impressive, climbing by 59% to EUR 9.9 million, up from EUR 6.2 million in the first three quarters of the previous year. “In addition to the growth in sales, the gratifying development in the operating performance indicators also reflects the persistent implementation of far-reaching cost reduction and efficiency enhancement measures,” Wolford said.

Against this backdrop, Wolford Group came close to doubling the result from continuing operations, which totalled EUR 8.9 million in the reporting period (Q1-Q3 2009/10: EUR 4.6 million). The net profit for the period rose to EUR 7.0 million compared to EUR 3.8 million in the first three quarters of the previous year, a rise of 86%. Earnings per share were EUR 1.43 (Q1-Q3 2009/10: EUR 0.77).

Significant sales increase in Wolford’s core geographic markets

From a regional perspective, most of Wolford’s core geographic markets generated considerable sales increases during the reporting period. The strongest growth rates were achieved by the Wolford Group in the region Asia/Oceania, where sales were raised by 33.7%. A similar development took place in Spain, where sales expanded by 27.9%, and in the USA, which posted growth of 23.2% percent. Wolford also achieved double-digit growth in Switzerland (+14.1%), Scandinavia (+ 12.3%) and Great Britain (+11.8%).

Wolford also managed to further increase total sales in Belgium (+ 7.4%), Italy (+ 5.8%) and Germany (+ 2.2%). Sales in France during the first three quarters of 2009/10 also rose (+ 0.5%) due to a clearly positive development in the third quarter, whereas Wolford suffered a slight decline in sales in Austria (- 1.6%) and in the Netherlands (-3.9%) compared to the prior-year period.

Monobrand distribution expanded to 61.8% of sales

Sales with Wolford’s proprietary stores (boutiques, shop-in-shops and factory outlets) showed a positive development during the period under review, featuring a 14.1% rise in sales. This growth was partially due to the consistent expansion of Wolford’s own distribution network. On a like-for-like basis, sales were up 5.9%. The share of total sales generated by retail outlets also increased further in the third quarter of the current fiscal year, rising from 47.4% in the first half of 2010/11 to 50.6% in the first nine months (Q1-Q3 2009/10: 47.4 percent).

Outlook

Wolford says its results reflect the persistent focus on improving distribution quality in line with the targeted expansion of its monobrand sales outlets and the implementation of cost reduction and efficiency enhancement measures.

“Wolford will further strengthen its market presence in the future by continuing these measures, as well as by expanding its sales and marketing activities, particularly in the Asian region. Moreover, the implementation of these measures will be supported by the timely market launch of new products,” Wolford said.

“Retailers reacted very positively to the new Wolford fashion collection. Pre-orders which were placed for the spring summer 2011 collection could be increased by 6.8 percent, and Wolford has already received consistently positive feedback on its fall-winter 2011/12 collection presented in January 2011.”

Wolford expects a rise in sales as well as a significant improvement in earnings for the entire 2010/11 fiscal year compared to 2009/10.

 

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