- Conditions remain difficult, both geopolitically and economically
- Sales up 29% year-over-year
- Earnings (EBIT) down 14% due to high costs caused by Inflation
- Progress made on market and brand positioning
- Stabilization of the positive sales trend expected for the year overall
In July and August 2022 a number of supervisory and management board changes were made. The team today remains focused on driving top line growth and strengthening operational controls across the business.
With sales of € 54.3 million for the reporting period from January to June 2022, Wolford recorded an improvement of 29.4% compared to the first half of 2021. Taking like-for-like growth into account, excluding the licensing business, this figure comes to +40%, which is at the upper end of the scale in relation to the luxury goods reference market.
The sales growth is spread across almost all geographical regions and distribution channels. The USA showed particularly strong growth of 40%. Sales grew by 30% in EMEA despite the ongoing war. In Asia/Oceania the previous year’s level was exceeded slightly despite the pandemic. Both retail and wholesale recorded double-digit growth. Sales via multibrand retailers improved by almost 60%. The online business also recorded positive development.
The ongoing structural reorganization and the difficult conditions continue to be reflected in the company’s earnings, with EBIT falling by 14.4% compared with the first half of 2021 to € -16.9 million. Prices of fabrics, paper, energy and logistics rose, in some cases significantly, due to inflation and shortages on the procurement markets. There was also an increase in staff costs in line with collective agreements. Under these conditions the company cannot expect any improvement in operating profit (EBIT) for the full year.
To ensure liquidity, the company has been granted loans by the majority shareholder. The company also maintains close contact with banks to secure further financing.
Work to Increase Presence and Visibility; Solid Marketing Plan Put in Place
The company has continued to work on expanding its visibility in the markets it operates in over the past few months. This includes developing a solid retail plan with six new store openings and relocations in key cities. The company opened a new flagship store in Paris in Rue Saint Honoré. In New York the Madison Store was moved to a new, bigger and better location, still on Madison Avenue. All the openings and relocations feature the new “Green Experience” store concept, which showcases the new brand image and respects the company’s sustainability standards.
The company also implemented a solid marketing plan to increase brand awareness and attractiveness. The new collaborations with the renowned brands Alberta Ferretti and GCDS have helped to increase the number of visitors across all channels and to reach new customer groups. Brand awareness has increased further thanks to a strong digital and social media strategy.
Outlook: Wolford Forges Ahead With its Strategic Approach
Following the significant sales growth achieved in the first half of 2022, the Management Board is confident that Wolford will stabilize the positive sales trend in the second half of the year. Wolford is on course in its quest to beat the previous year’s sales in 2022 – despite the still difficult market conditions.
The company will put the work it started last year with the Northstar strategy into concrete operational practice in the current year with a project it has named “The Spacer”. The Spacer focuses on evolving the brand and product strategy and aims to create space and speed in achieving Northstar.
Now that its strategic course has been set, Wolford is concentrating more intensively on improving its operating processes further. Time-to-market should be shortened and operations structured in such a way that the company can respond more flexibly to unpredictable market conditions in the future.