Van de Velde sees strong decline in first-half operational profit
Since April, Van de Velde has been preempting a drop in its first-half 2018 results. After an initial profit warning, backed by the publication of its previsional results in July, the definitive figures have dropped.
The Belgian lingerie group, which operates brands Marie Jo, Prima Donna and Andres Sarda, finally announced that its revenues fell 3.9%, down 2.9% in comparable terms and 0.6% in constant exchange rates, to 114.2 million euros for the first six months of the year.
To explain the result, Van de Velde highlighted its wholesale operations, down 2.9% in comparable terms for the group's brands, despite the launch of its Marie Jo brand, which recorded strong results, according to the Belgian group.
"The reduction in the level of retail foot traffic, coupled with the changes in buyer behaviour, have had a negative impact," said Erwin Van Laethem, the group's CEO.
The group's EBITDA recorded a 25.1% drop, falling from 35.5 to 26.4 millions euros. Again, the reason behind the drop was attributed to wholesale, as well as lower margins.
The group also blamed unallocated costs, which increases to 2.3 million euros on the back of costs associated with the group's e-commerce platform. Net profit fell to 15 million euros, from 20 million euros last year, said the group.
"Van de Velde continues to invest in an evolutionary platform, with the view of future growth. These costs weigh on profitability in the short-term," said Bart Rabaey, CFO of Van de Velde.
Total investments in the first-half 2018 reached 7.7 million euros, all of which were financed by equity.
Looking ahead, Van de Velde expects to see revenues "slightly drop" on a comparable basis, in addition to a "very sharp drop in profitability," on the back of its digital investments.
"Van de Velde chooses to keep making the necessary investments to make an evolutionary platform, which will allow us to pursue international growth," added Van Laethem.
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