European Lingerie Group slows down sales decline after Q4 2018 rebound
Following a negative first part of the year, the European Lingerie Group made up for lost ground in the fourth quarter 2018. After recording a 5.8% sales downturn from January 1 to September 20 2018, the Stockholm-based group posted a 4.7% sales rise in the last quarter of the year, which was worth €18.1 million. It was an encouraging result, though not enough to compensate for the shortfall in the first nine months of the year, as ELG’s annual revenue of €77.2 million was equivalent to a 3.6% decrease compared to 2017.
Operating income for the financial year as a whole was €6.1 million, down 39.6%, while net income decreased by 93.1%, down to €413,000. The profitability figures for the year’s last quarter were even worse: operating income was €434,000, down 63.5% compared to the same period in the previous year, generating a net loss of €1.4 million.
The countries with the worst sales shortfall in 2018 were Belarus (-16.4%), Russia (-9.6%) and the Ukraine (-9.2%). In Q4 2018 however, these results were slightly improved on or even reversed, with variations respectively of -4.2%, +41% and +21.4% compared to the same period in the previous year. In France, ELG’s revenue lost 4.8% in 2018, in line with the lingerie market’s overall performance. In 2018, the only regions to post positive results for ELG were the Baltic countries (+0.5%), Benelux (+1.9%) and Poland (+3.6%).
ELG has 1,332 employees and 5,000 stores in 46 countries. It is one of the very few groups in the lingerie industry operating a fully vertical organisation from production to distribution, with Lauma Fabrics (a materials and straps producer), Felina International (owner of the Felina, Conturelle and Senselle lingerie brands) and French multi-brand lingerie e-tailer Dessus-Dessous, which ELG acquired in June 2018.
In 2018, the worst-hit of ELG’s lines of business was textile production, whose revenue lost 4.9%. As for the group's own lingerie labels, Felina, Conturelle and new entry Senselle, their combined revenue was down 2%. In Q4 2018, their revenue actually grew by 12.8%, boosted by Felina’s new swimwear and sportswear lines and by the launch of the group's latest brand, Senselle.
Between the end of 2018 and the start of 2019, ELG also bought Yustyna Ltd, renaming it Senselle Ltd, a Belarus-based producer, as well as new manufacturing equipment for Lauma Fabrics. At the same time, Sara Shahin was appointed creative director of Felina.
“We continue to make strategic investments and to undertake new initiatives to respond as quickly as possible to the market's changes. One of these initiatives is the extension of our product range. Another is the development of our e-tail channel, which will enable us to adopt a fully fledged omni-channel strategy,” said Peter Partma, CEO of ELG.
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