Wolford half-year sales boom but EBIT loss widens

By

Sandra Halliday

Published
Sep 26, 2022

Upscale hosiery and intimates specialist Wolford has said that its latest half year “met sales expectations” but that “conditions remain difficult, both geopolitically and economically”.

Sales jumped in the first half, but earnings before interest and tax (EBIT) were down 14.4% at a loss of €16.9 million “due to high costs caused by Inflation”.

Nonetheless, “progress was made on market and brand positioning” and it said “stabilisation of the positive sales trend [is] expected for the year overall”.

So, let’s look at the details. It saw sales up 29.4% at €54.3 million for the period from January to June. Taking like-for-like growth into account, excluding the licensing business, this figure was actually an impressive +40%, which is at the upper end of the scale in relation to the wider luxury goods market.

The sales growth was spread across almost all regions and distribution channels. The US boomed with a 40% rise, but EMEA managed a 30% jump, despite the ongoing Russia-Ukraine war. In Asia/Oceania, it “slightly” beat the previous year’s level, despite the impact of the pandemic. 

Both retail and wholesale saw double-digit growth and sales via multibrand retailers jumped nearly 60%. The online business also saw “positive development”.

The firm’s “ongoing structural reorganisation and the difficult conditions” were responsible for that EBIT loss. “Prices of fabrics, paper, energy and logistics rose, in some cases significantly, due to inflation and shortages on the procurement markets,” it said. 

There was also an increase in staff costs and the company doesn’t expect any EBIT improvement for the full year.

To ensure liquidity, it has accessed loans from its majority shareholder and “maintains close contact with banks to secure further financing”.

Wolford added that it has “continued to work on expanding its visibility” in its markets in recent months. This includes “developing a solid retail plan with six new store openings and relocations in key cities”. It opened a new flagship in Paris on Rue Saint Honoré and in New York, its flagship was moved to a “bigger and better location”, still on Madison Avenue. 

Meanwhile, new collaborations with 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”.