Belgian fashion group FNG has had an abysmal 2019, and the Covid-ridden 2020 promises to be even worse. A tough recovery plan seems highly necessary.
The group's turnover did grow by 3.7 % to 483.3 million euros, but that growth came courtesy of acquisitions: discounting the integration of Ellos Group and the Theo Henkelman Group, turnover went down 5.3 %. Even worse: the company's net loss amounted to 60 % of the total turnover (at 292.1 million euros), while the total debt is now over half a billion euros.
The financial report stipulates that these are preliminary results, as uncertainties remain about certain complex international transactions and structures. Moreover, they do not include the difficulties stemming from the Covid-crisis.
The report is quite clear about the reasons behind the dramatic results, saying that while the used 'Buy and Build' strategy may be logical in a sector where having economies of scale offers clear benefits, the strategy included major risks.
The main question is what to do next: FNG is investigating all options to reduce or spread the burden of its debts and analysing all activities to make up a realistic plan for the future. The company will focus on 'digital first' and to increase synergies between its different subsidiaries. Crisis manager Yves Pollé, who has joined the company last Monday, knows what to do...