Orchestra-Prémaman suffers heavy losses

Orchestra-Prémaman has had an awful financial year, in which turnover went down and losses quadrupled for the children's clothing chain. Especially on its French home market, the situation is dire.

 

Aggressive discounts

Its financial year 2018-2019 saw a huge turnover decrease for Orchestra-Prémaman: sales went down 6.8 % to 570.8 million euros. Gross margins plummeted from 6.2 % to 0.5 % and net losses quadrupled from 20.5 million euros to 88.2 million. The results were not really a surprise: the retailers had already issued several profit warnings.

 

A number of reasons are to blame, according to the retailer: on its French home market, the yellow vest momement caused a sharp decline of visitors in both urban and suburban stores. More generally, times are tough for fashion stores - and even more so for stores specialising in children's clothing. The only answer Orchestra-Prémaman saw to turn the tide was to issue aggressive discounts, which cut down heavily on its profitability: financial debts went up 21.6 % - also caused by the longer time stock stayed in the stores.

 

Still the company is hopeful for the future, as commercial actions pushed turnover up 2.5 % in January and February. The chain's loyalty scheme is ever increasing and now boasts a record of 2.1 million members, 12.4 % more than just a year ago. Despite being active in forty countries, more than half of the chain's 600 stores are still found in its country of origin, France.