IC Group confirms revenue slump in first half of 2017-18 financial year
The sales decline which started in the first quarter of the 2017-18 financial year for Danish fashion group IC has stretched to the first half of the year. The Danish group, owner of Peak Performance, By Malene Birger, Tiger of Sweden, Saint Tropez and Designers Remix, reported a 2.2% decrease in revenue in the July-December 2017 period, falling from DKK1.517 billion in the first six months of 2016-17 to DKK1.483 billion in the current financial year (€199.2 million).
Peak Performance, which reported a slight decrease in revenue between July and September 2017 (-0.6%), rallied in the second quarter, growing 7.2% in the first half of the year and reaching DKK659 million. Though the brand's sales, both direct-to-consumer and via multibrand retailers, have grown, notably thanks to new store openings and a burgeoning outlet business, IC Group is still uncertain about the future of the mountain sports label within the group.
Posting only a slight decrease (-1.1%), By Malene Birger did better in the first half of the financial year than it did in the first quarter. Sales via distributors and multibrand retailers were down, but were partially compensated by the performance of online and monobrand store sales. The brand's operating income grew to DKK13 million compared to DKK4 million the previous year, and operating margin was 7.5%, well up from the 2.3% recorded the previous year, thanks to a higher gross margin and lower costs.
As for Tiger of Sweden, its revenue lost 10.6% in the July-December 2017 period, reaching DKK455 million. The loss was blamed on multibrand retailer performance, and contrasted with a slight growth in direct retail sales.
The IC Group's other brands (Saint Tropez and Designers Remix) also reported a shortfall, with a revenue of DKK194 million in the first half of 2017-18, compared to DKK215 million the previous year, notably due to the closing down of 6 Saint Tropez stores in 2017.
For IC Group as a whole, the forecast for the January-June 2018 period is on par with the first half of the year, with gross margin stable at approximately 5% and a slight decrease in revenue on a yearly basis.
Peak Performance is expected to produce a modest revenue growth, with higher profits than last year, and By Malene Birger, despite lower revenue, is also expected to generate improved profits.
Tiger of Sweden's revenue and profits are expected to decrease, and also for the group's other brands the 2017-18 financial year is forecast as negative, following the changes in Saint Tropez's retail network.
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