French fashion chain Etam has grown its profit soar 26.1 % in 2014's first half, reaching 11.1 million euro. The growth was mainly the result of higher commercial margins, as the group's turnover growth was a mere 0.3 %.
Yuam slows turnover growth
Etam's turnover reached 598.4 million euro in the first half of 2014, only slightly higher than the 596.8 million euro it managed in 2013. Cause was the yuan, because of the Chinese currency had remained stable, then sales would have been 6.5 million euro higher. Like-for-like sales, at stable exchange rates, would have been up 1.6 %.
Etam's gross turnover margin grew from 57.7 to 58.7 %, which left the company with 351.5 million euro compared to 344.4 million euro last year. The increase must be considered in its context however: it was mainly achieved through an increased sale of its Chinese stock, consisting of products from previous seasons. That way, devaluations could be brought back. European margins dropped slightly as purchases in American dollars were less favourable.
Decent European business
Europe did manage to keep things level: decent sales have helped to increase European operating profit from 18.1 to 23.7 million euro. Selling old stock in China, below its purchase price, has led to a 0.9 million euro loss, compared to a 0.2 million euro profit last year.
The debt burden has wiped away part of the operational profit. Debts were at 154 million euro (net) at the end of June, 16.2 million euro more than the year before. Important to know is that Etam has struck a deal with its banking consortium to keep its 237.5 million euro line of credit open for another 2 years, until 12 December 2019, at better rates.
Chain starts cosmetics corner
Etam has confirmed it will open a cosmetics corner in 26 of its 300 lingerie stores by November, with the larger stores as the first to get this addition.
It will occupy 15 to 20 sqm, near the entrance, so that customers cannot ignore it. Trained personnel will assist customers in their possible purchases.