Swiss fashion group Charles Vögele is closing all 22 locations in Poland and the Czech Republic as it wants to concentrate on its core markets Germany, Switzerland and Austria. As a result, some say the company is also thinking about leaving the Benelux.
Five losses in a row
Charles Vögele has been struggling for some years: for the fifth year in a row sales dropped (last year -4.4%) and the company made a loss of 90 million euro in the past fiscal year. Despite implementing a one brand strategy and internal reorganisations, causing hundreds of lay-offs, the company continues to pile up losses.
Two months ago the Swiss had said to consider withdrawing from Eastern Europe, but now the company confirms closing all of its locations in Poland and the Czech Republic. Hungary, Slovenia and Austria, also grouped as Eastern Europe activities, will remain open.
“Cutting out loss-making country organizations would enable Charles Vögele to reduce complexity within the company and focus on core markets.” Those core markets are Germany, Switzerland and Austria.
Exit from Benelux?
The question remains what the effect will be on the activities of the company in the Benelux. Charles Vögele has 148 shops in the Benelux, worth about 11% of gross sales. It is however no secret that the Swiss are also suffering from the crisis in that region.
According to the Neue Zürcher Zeitung the withdrawal from Poland and the Czech Republic is the start of a broader geographic shift. The Swiss newspaper writes that sooner or later Charles Vögele will also leave the Benelux, where margins are even smaller than in Eastern Europe, although unions are stronger.
At the end of 2012 Charles Vögele had 812 shops in Switzerland, Liechtenstein, Germany, Belgium, The Netherlands, Austria, Slovenia, Poland, Hungary and the Czech Republic and a total of 6,743 employees. Three years ago that were 857 locations and 7,729 employees.