Wolford still loss-making but performance improves
Wolford said the first half of this year “developed similarly to the last months of 2020” with trading in the US and China continuing their “solid growth”, while ongoing and new Covid restrictions “led to significant business losses in Europe”.
That said, it believed it was a “strong” first half with double-digit sales and earnings growth. That was in spite of six or seven months of “continuous lockdowns in numerous European countries”.
It made H1 2021 more challenging in some ways than the pandemic-hit H1 of 2020. The first wave last year had seen store closures lasting for only two or three months, but the longer lockdowns this year were a “significant challenge”.
Yet the firm still managed turnover of €41.9 million for the reporting period January to June, up 10% on the previous year. Meanwhile, the loss of €13.3 million (it didn't specify whether this was an operating or net loss) was actually a 31% improvement on last year.
The 2021 figure was helped not only by higher sales but also by a significant reduction in operating costs and a 4.5 percentage point increase in the gross profit margin to 81.4%.
It saw sales growth in nearly all channels and geographies and its online sales rose 18%. The US and China businesses also grew in double-digits, while in EMEA, “sales were approximately maintained” despite those aforementioned “significant business losses” in Europe.
The company also said its new brand architecture introduced last year is “well established thanks to a strong plan of collaborations within the ‘W Lab’ and the consolidation of ‘The W’, the collection with a more contemporary and urban attitude.”
The company is pinning a lot of expectations on its collaborations and said that “with the first international cooperation of the year, Amina Muaddi x Wolford, a new and fashion-conscious consumer group was reached internationally, driven by a predominantly digital marketing approach and presence in selected fashion stores”.
Key markets were also “successfully expanded even further through local collaborations”. The next local collab will be a link-up with Neiwai, a Chinese brand known for its simple and sustainable lingerie, to be presented in China this month.
Wolford said that with the strong half-year results “and a solid strategy for the second half of the year”, the board expects to break-even for the full-year and sales are going well so far in the second half.
This is being (or will be) helped by last month’s implementation of a new digital omnichannel architecture, a reduction in the “time to market” (the period from product design to shelf) by around 50% to 32 weeks beginning November 2021, the completion of the outsourcing of logistics in Q4 and the introduction of sourcing “for a short-term response to market developments”.
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