Germany's Gerry Weber begins realignment program "Fit4Growth"
It's all change ahead at German fashion group Gerry Weber, as it starts its realignment program, "Fit4Growth", which it announced in January.
The company confirmed its preliminary figures for the financial year 2014/15 published at the end of January 2016. In the past financial year 2014/15, consolidated sales revenues of Gerry Weber International AG amounted to EUR 920.8m, while earnings before interest and taxes (EBIT) totalled EUR 79.3m.
Its Fit4Growth realignment program is meant to lay the foundation for profitable long-term growth in the next 18 to 24 months. It comprises four elements: (1) Optimise the Retail operations; (2) Adjust structures and processes; (3) Strengthen the Wholesale operations; (4) Modernise the brands. The measures presented will work on three levers, namely sales revenues, efficiency and costs as well as gross profit, the retailer said.
Gerry Weber will now consolidate its store network, closing 103 stores that fail to reach the margin targets, and/or have a negative growth outlook, this financial year and next. It also aims to increase the value of its products and collections, and "rely much more strongly than before on digitalisation and exploit the omni-channel potential."
The company will also cut about 200 jobs at the headquarter in Halle/Westphalia, as well as approximately 50 jobs in the foreign subsidiaries. Another 460 employees in the domestic and international stores will be affected by the consolidation of the store network.
The realignment will see each Gerry Weber brand operated as a strategic business unit, and the group has also launched a test phase for a new Gerry Weber brand.
"The Managing Board expects the Gerry Weber Group to complete the realignment programme in the next 18 to 24 months and to enter a phase of sustainable profitable growth as of the third year. In view of the implementation of the "Fit4Growth" realignment programme, the Managing Board projects severe cuts on the revenue and earnings side of the Gerry Weber Core segment and, hence, for the Group as a whole," the company stated.
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