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Gerry Weber reports declines despite cost-cutting initiative

German womenswear business Gerry Weber has reported a 2.2% drop in revenue to €880.9m (£778.2m) for the year to 31 October, as EBITDA dropped by 25% to €58.2m (£51.4m).

Group gross profit margin dropped from 60.4% to 58.6% during the year.

Gerry Weber core brands (Gerry Weber, Taifun, Samoon and talkabout) contributed €686.6m (£606m) to group revenues down 4% from the previous year, primarily due to 68 store closures. Like-for-like revenues for the core brands declined by 1.9% to €392.6m (£346.8m).

The core wholesale segment contributed €294m (£259.7m), down 1% on the previous year.

Gerry Weber’s cost-saving programme called Fit4Growth launched in early 2016 and completed on 31 October. It generated cost savings of roughly €30m (£26.5m). The group is now initiating further cost-saving measures in the areas of procurement, product development and product range design.

CEO Ralf Weber said: “The moderate decline [in wholesale] compared to the previous year clearly reflects the success of the measures implemented in the context of the Fit4Growth programme as well as the increasing attractiveness of our new collections.

“The company’s innovation capacity and financial strength, and its ability to adapt to changing requirements, will lead Gerry Weber back to sustainable profitable growth and vigorously implement all measures that are necessary to achieve this goal.”

The company also confirmed its projections for the year, expecting revenues for the current financial year of between €870m (£768.4m) and €890m (£785.9m).

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