Wolford hit hard by pandemic but expects profits in late 2021
Upscale hosiery and intimates specialist Wolford delivered a brief update this week and revealed how hard the pandemic hit it, although it also said that its restructuring program is gaining traction.
Given that it was already struggling before the coronavirus crisis began, it's good news that the firm’s operating results for the latest period are "significantly higher" than the previous year. And it expects to return to profitability in 2021.
The pandemic had a "drastic" effect on the 2019/20 financial year that ended in April and led to a €10.9 million drop in revenues. Meanwhile the 2020/21 year saw revenue losses of €15.5 million up to August 31, although those losses reduced as the latest financial year progressed.
But the company has also made the most of the opportunities that the pandemic has presented and its Wolford Care Mask that has been made since March has generated revenue of around €5.1 million so far. Masks “have become an integral component of the company’s product range”.
It has also focused heavily on its online distribution channel and this has been a growth driver, generating around 25% of its revenues from May to August, compared to 13.3% a year earlier. It's shown a year-on-year growth rate of around 58%, although it was unable to fully offset the revenues lost in other business areas.
But the firm said that lost revenues were primarily made up for with the help of the extended restructuring program by cost savings achieved, especially in terms of rental payments, procurement, and staff costs, as well as by drawing on all available Covid-19 government aid.
That means that as of the end of August, EBIT has improved by nearly €3 million (22%) in the year to date. It should be profitable by the end of the financial year.
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