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Bestseller, the group behind Vero Moda, Jack & Jones and more, closes its financial year “unexpectedly positive”. The decline in turnover was smaller than expected, although profits plummeted rapidly.
Grateful for remaining profit
Bestseller says it is “grateful and proud” that the financial year 2019/20 could still end with (a little) profit. In the past year, pre-tax profit fell by no less than 72% to 776 million Danish krones (104 million euros). Due to the corona crisis, however, the Danish fashion group had expected red figures: CEO Anders Holch Povlsen talks about “an unexpected positive result”.
The decline in turnover was more limited than expected: the group behind Only and Vila achieved net turnover of 24.1 billion krones (3.2 billion euros), which was 6.5% less than a year earlier. Far less than usual and hoped for, the fashion holding company admits, but “taking into account the current global situation and the enormous challenges that both society and we as a company face, we can only be proud and satisfied to make a profit.”
More shops survive than expected
The clothing retailer and wholesaler claims to have worked closely with suppliers and wholesale customers, leaving the store portfolio “more or less unchanged”. Almost all own shops as well as wholesale outlets have survived the covid crisis so far. The company does admit that this is due to strong concessions from landlords, which enabled Bestseller to retain more rental contracts than expected. Only 14 of the 2,600 outlets were permanently closed.
During spring, the multi-brand player appealed to a support package from the Danish government, but now Bestseller has already repaid that money. However, the group was forced to lay off 750 employees and Povlsen warns of possible store closures in the future: “We will, as always, adapt our store portfolio to the profitability of each market”.
After all, not all markets are the same. According to Bestseller, business life in India, North America and South America, among others, is virtually at a standstill, while Central and Northern Europe is quickly regaining a foothold and Southern Europe is also making progress. To achieve a full recovery, there is still a lot of work to be done. This will include sustainability and digitisation, which, according to Bestseller, are two fundamental pillars of the company’s future strategy.
