After years of losses, Hema now experienced its second profitable quarter in a row. The department store chain is also happy with its annual turnover: it published a 1,235.5 million euro record turnover, a 3.5 % increase.
Losses increase because of Lion Capital attempted sale
Hema says that its investments in international growth and online expansion are paying off and are clearly visible in its annual results. The Dutch department store chain managed a 3.5 % turnover increase in 2017, but that did not result in a profit, rather compounding losses. Its net loss reached 30.9 million euro compared to 26.2 million euro the year before.
It attributes an astonishing 23 million to “one-time costs related to the refinancing deal and the exploration of its strategic options”. In short: owner Lion Capital’s plans to sell Hema is costing the retailer a lot of money, especially considering the fact the search has not been successful.
Regardless, Hema is happy: turnover went up in every single country where it is active and the same goes for every important product category. On a like-for-like basis, looking at stores that have been open for more than 12 months, turnover grew 2.1 %. Online turnover surged ahead 31 % in 2017.
Net fourth quarter turnover grew 3.8 % to 356.9 million euro and it generated net profit for the second time in a row, this time 6 million euro. One has to look back to 2012 to find a profitable quarter for Hema.
International growth and higher margins
“We can look back on a strong year with plenty of achievements. In the first half of 2017, we finalized our clean-up program to reduce our excess stock. We managed to hold onto the additional turnover that clean-up program generated in the past few years. At the same time, we increased our margins for that turnover”, Hema CEO Tjeerd Jegen said in a press release.
In the upcoming months, Hema wants to continuously improve its gross margin and it also expects to speed up its international expansion with new stores in existing and new markets: it will enter the Austrian and Middle Eastern markets in 2018.
It already added a record number of 25 stores to its international store network last year: 20 in France, 3 in Spain, 1 in Belgium and 1 in Germany. The latter was also its strongest growth market (+ 23.9 %), followed by France with 20.4 %. Hema plans to open another 30 to 35 stores outside of the Benelux in 2018.