Damartex' operating income has grown 34 % over the past fiscal year, mainly because it moved its production. The company is known for its store chain, Damart.
Cut-backs result in profit
Damartex' production used to be located in China, but since last year, the company moved its production facilities to India and Bangladesh, which has helped boost its operating income 34 % to 17.6 million euro. Net profit even grew 88 % to 12.7 million euro.
The group's total turnover grew 2 % and reached 697 million euro, although it was only because of positive exchange rate fluctuations. If those are ignored, turnover would have dropped slightly, down 0.2 %.
Not only has Damartex moved its production to India and Bangladesh, it has also cut costs internally. Damart France cut 34 jobs, which will save 2 million euro per year.
Investments in production and in Germany
The company has also planned additional investments. Its distribution center should be fully automated by May 2016 and it will also open 6 to 8 stores every year after it had previously temporarily halted its store openings.
The company is also apparently planning to acquire a German company in an attempt to gain traction in that country. It tried to do similarly with its own stores, but that is not going too fluently.