Marimekko upbeat as collabs pay off, has big plans for 2020
Marimekko was in an upbeat mood Thursday as the Finnish fashion fabrics and lifestyle company delivered a “strong” set of results for the year ending December 31. It was boosted by a flourish in the final quarter on strong Holiday numbers and international traction.
So expect Marimekko to ride that wave of success this year, announcing it will “significantly” raise its investment, centred on international growth, citing Asia-Pacific and, in particular Japan, via an improved omnichannel footing.
Not much detail and costings were included in the report, but it will include the rollout of an “experimental omnichannel retail experience of the future” while “revamping and expanding” its store network and investing in the development of digital business, "which is an important driver of growth”.
The company aims is to open around 10 new Marimekko stores and shop-in-shops in 2020.
It will also increase its marketing efforts “to raise global awareness and by further strengthening our competences in international business”. For now, watch this space.
But back to that strong 12-month trading performance. Headline figures for the period included net sales up 12% to €125.4m, while comparable operating profit “improved significantly,” coming in 40% ahead at €17.1m, boosted by sales growth and a better sales margin.
CEO Tiina Alahuhta-Kaskosaid: “Our net sales increased in all market areas. Another year of continued strong development shows that we are moving in the right direction and making good progress towards our long-term financial goals of annual net sales growth exceeding 10% and an operating profit margin of 15%.”
Full-year sales in Finland, which accounts for half its revenues, increased 12% and retail sales in particular “showed an especially good trend”. In its international markets, 12% total growth was achieved particularly through wholesale and licensing income in the important Asia-Pacific region, and via wholesale in EMEA.
Although not providing figures, Marimekko also pointed to its growing digital influence: “During the past few years, we have invested in the long-term development of our digital business, and last year vigorous growth in our online sales continued.”
For Q4, sales were even better, up 17% to €34.7m, driven by a successful Holiday trading period, with growth mainly coming from retail and wholesale in Finland, as well as increased wholesale and licensing income in Asia-Pacific.
That said, year-on-year wholesale growth in Asia-Pacific was mainly due to the fact that some deliveries to the region took place in Q1 2019 instead of Q4 2018.
Operating profit for the final quarter surged to €3m from €1.2m a year ago. Marimekko said earnings were boosted by sales growth, but higher fixed costs had a "weakening impact”.
But its overall success ensured the group remained upbeat on its 2020 net sales outlook. Although guardedly not providing a figure, it did forecast revenues will come in “higher than in the previous year”, while comparable operating profit is estimated to be around "the same level as, or higher, than the year before.”
Maimekko added: “In our strategy period extending to 2022, our goal is to achieve markedly stronger growth and profitability than before. Accomplishing this goal requires an internationally recognised and desirable brand as well as a product portfolio that appeals to an increasingly broad global customer base.
It highlighted its ongoing “successful” collab with Japan’s Uniqlo. Although not divulging figures, it said the The Uniqlo x Marimekko brand collab introduced in November “again presented us with a unique opportunity to introduce a very large global audience to Marimekko and so strengthen our core business through increased international brand awareness.”
Elsewhere, it said the results of its long-term work to “modernise collections” were also evident. “Among our product lines, the strongest growth was in the categories that spearhead our communication activities, namely fashion (20%) and bags (17%). This growth was supported by interesting product launches, including the Kioski streetwear collection and a new leather bag line.”
Returning to its 2020 outlook, Marimekko said although the impacts of the coronavirus are still uncertain, “the epidemic can have a negative impact on sales, profitability and the operational reliability of the global supply chain.”
It noted that although some 15% of Marimekko’s products are manufactured in China, it currently estimates net sales in the Asia-Pacific region will continue to grow this year,”with increasing demand for its products in this area especially in the longer term.”
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