Bregenz, 12. May 2021: Following the reopening of stores in Europe, the USA, and China after the first wave of Covid-19 in the second quarter of 2020, the renewed lockdown in Europe since October 2020 has led to significant business losses, which will extend in all probability into the second half of 2021. Nevertheless, Wolford generated sales of €68.0 million and therefore limited the decline in sales to €22.8 million (approx. 25%) compared to the same period of the previous year (May to December 2019).
Strong short fiscal year despite Covid-19: Company able to pay off debt under its own management, earnings significantly higher than previous year
Despite the sales losses due to Covid-19, Wolford achieved a result (Group Profit/Loss) of €+12.8 million and therefore significantly exceeded previous year’s result of €-14.5 million. This figure includes the effects of the sale of real estate and the change in the value of right-of-use assets following the implementation of impairment tests. As reported, the purchase price of €72 million for the property at Wolfordstrasse 1-3 in Bregenz was used at the beginning of May to pay off all debt.
Wolford made good use of the short fiscal year and implemented further restructuring measures. In particular, the company systematically continued to implement its stringent plan for the sustainable realignment of Wolford.
Personnel costs reduced by more than 20%, online sales increased by 45%, sales of Wolford Care Masks exceeded €10 million.
Due to the implementation of the restructuring program “PITBOLI” (Program for Immediate Top and Bottom Line Impact), the planned measures were launched at the beginning of 2020 and Wolford achieved its sales and efficiency effects accordingly. The restructuring program “PITBOLI” thereby delivered a reduction of a further 20% year-on-year on the personnel cost side. The implementation of extensive additional measures in cash management ensured sufficient liquidity throughout the short fiscal year. The cash flow in the short financial year increased by € 9.7 million.
In the reporting period, online sales have been the main growth drivers, with a 45 % increase year-on-year. The revenue share of the company’s own online business and the associated online business of its wholesale partners increased to a total of around 21 %. Wolford’s retail and wholesale business also contributed to achieving sales. Both the Spring Summer 2020 and the Fall-Winter 2020/21 collection were very well received in all channels. To date, a revenue of €10 million has been generated through the sale of approximately 700,000 Wolford Care Masks since the beginning of production in March 2020. As a new accessory, the different styles of the Wolford Care Mask have become a must-have of the Wolford product range.
Brand architecture extended, sales presence internationally strengthened
The “The W” and “W lab” collections were also successfully incorporated into the brand architecture and are part of the new face of the Wolford brand. The collaboration with adidas has significantly exceeded expectations, as well as the launch of “The W” on the online platform Farfetch. Furthermore, a relaunch of the Essential Collection has started, which will be implemented in the upcoming months with targeted campaigns. With the Aurora Monogram products, part of “The W” collection, Wolford continues to increase its commitment to sustainability. All new Aurora Styles are Cradle to Cradle Gold Certified™. Wolford’s goal is to be the first eco-neutral brand in the fashion industry.
Wolford‘s strategy to expand its presence in Poland, Scandinavia, United Arabic Emirates, Central America, and Japan is also successfully implemented. Wolford has reached partnership agreements with well-established agencies and distributors to leverage their markets’ knowledge and presence in their respective territories and several multi-brand doors have been opened during 2020.
Wolford remains to see it as its goal within the fiscal year 2021 to reach breakeven As of March 31, 2021, Wolford has closed the first quarter of the current fiscal year with earnings (Group profit/loss) 22.4% higher than the previous year, thanks to the strict consolidation course, despite the ongoing store closures in Europe as a result of Covid-19 related lockdowns. Encouraging factors here were not only the continued success on the cost side, which is well ahead of plan, but above all a gross profit margin of 82.1%, 1.7 percentage points higher than in the same period of the previous year. Due to numerous additional sales measures such as remote selling and streaming, March sales was almost €2 million (38%) higher than March sales in 2020.
With the new long-term strategy, “Northstar – Masterplan for Wolford” Wolford wants to ensure the continued success and sustainable realignment of the company. This involves an overall strategy regarding the topics “Brand”, “Product Range”, “Location” and “Channels” and the development of the “PITBOLI” measures towards 12 strategic projects.
The reported results of the short fiscal year show that the management is focussing on the consistent realignment of Wolford. The decisive factors now are a continued stable sales performance despite the Covid-19 pandemic, as well as a consistent continuation of “PITBOLI” and the implementation of the Northstar-Masterplan-Strategy.