The Charles Vögele Group has been hit hard in the first part of 2015, mainly because of negative exchange rate fluctuations. When the minimal exchange rate was lifted, it mainly experienced tremendous price pressure in its home territory, Switzerland.
Price pressure in Switzerland
"When the Swiss National Bank lifted the minimal exchange rate on the euro mid-January, that caused a sizeable increase of the price pressure in our Swiss home market. It also created a massive, currency-driven turnover drop in all other regions", CEO Markus Voegeli said.
The fashion company's turnover dropped 13.3 % to 392 million Swiss francs (360 million euro), although the like-for-like turnover drop was much lower at 4.1 %. The company did manage to lower its operational costs by 24 million Swiss francs (22 million euro), down to 262 million Swiss francs (240 million euro). Nevertheless, that cost-cutting measure did not balance out the exchange rate fluctuations.
That meant that Charles Vögele had to deal with a 36 million Swiss francs (33 million euro) loss, which is three times as much as its losses last year (12 million Swiss franc).
Charles Vögele's Benelux operations did present positive numbers: net turnover grew 0.7 %, while German turnover dropped 4 % and Swiss turnover even dropped 8.6 %.