French entertainment and electronics retailer Fnac Darty (owner of Belgian chain Vanden Borre and Dutch BCC) has experienced a “solid 2017”, with a nearly 40 % turnover increase.
“Very solid results”
Fnac and Darty merged in the summer of 2016 and have since generated a 7.44 billion euro (+ 38.7 %) turnover in their “first year together”. New store openings were the main reason for the increase: the group opened another 78 stores, including 58 franchise stores, while the like-for-like turnover increase was barely 0.5 % (compared to 2 % in 2016, when both retailers were still independent). Operationally, the merger group posted a 270 million euro result, compared to a “mere” 162 million euro in the year before. Its profit margin grew from 2.7 to 3.6 % and its net profit reached 37 million euro.
“In a sluggish context in which all retail players face major transformations, our Group demonstrates the strength of its omnichannel model”, Enrique Martinez said. He is the group’s new CEO, following Alexandre Bompard’s transfer to Carrefour. Fnac Darty has become France’s second online player, following the impervous Amazon, but ahead of Casino's CDiscount.
Mixed result in the Benelux
The group had a mixed performance in the Benelux: turnover grew 1 %, but there was a 1.3 % like-for-like turnover decrease. Belgian online sales surged and the company also opened another eight stores in the region, but it did encounter “increased competition”. The “restructuring is paying off in the Netherlands and profitability is advancing”, a statement said.
CEO Martinez is hopeful regarding the company’s performance in 2018: “We confirm our objective of €130 million of synergies delivered by the end of 2018, and our medium-term objectives targeting higher growth than our markets and a current operating margin between 4.5% and 5%.” The joint purchase program with Carrefour and another 200 franchise store openings should help achieve its goals.