Lingerie producer Van de Velde will evaluate whether it has to lower the balance sheet value of Intimacy, an American chain, because the channel’s sales dropped considerably and it might have breached credit card regulations on several occasions.
American sales below expectations
In 2007, Van de Velde bought a 49 % stake in Intimacy, which it enlarged in 2010 to 85 % with an option to buy the remaining 15 %, but Intimacy sales are well below the expectations as the 2013 turnover dropped a little over 12 %. Nevertheless, those were encouraging numbers considering the drop in like-for-like turnover was smaller in the second part (- 4.8 %) than in the first part of 2013 (- 11 %).
Intimacy has also been summoned for alleged breaches of the credit card legislation in America, because there is a dispute about which credit card details can be placed on a receipt. The case is still only being investigated, but Van de Velde has stated that customers have not been disadvantaged at all.
The chain, located in Schellebelle, is now waiting to see how things evolve. “The impact on the carrying value of the Intimacy brand name and goodwill will be examined when the figures are compiled for the first six months of the year”, a press release stated.
Profit 25 % higher
Van de Velde’s numbers for 2013 showed that it performed admirably in the past year, with a 0.4 % turnover increase compared to 2012, to 182.4 million euro. An expensive euro, which caused currency exchanges to negatively affect the numbers, and Intimacy’s issues were a setback.
Despite all this, net profit grew 24 % to 31.8 million euro, but in 2012 it had to recognize an 8 million euro impairment on goodwill and the Andres Sarda brand name. Shareholder dividends are maintained at 2.15 euro per share.
Promising start to 2014
Van de Velde sees promising things for wholesale in the first six months of 2014 with a light growth in lingerie preorders, even for Andres Sarda. PrimaDonna’s recently-launched Swim collection is also putting up excellent numbers.
Retailwise, Van de Velde is looking towards Great Britain, Germany and Asia where it hopes to expand Rigby & Peller, whereas the Netherlands will get more of the Lincherie concept.