Sales are back to pre-pandemic levels at Dutch fashion chain WE, but rising costs have caused profits to plummet. The chain is now focusing on efficiency gains and margin improvements.
WE International realised a net turnover of 280 million euros last financial year, which is almost 20 million more than in 2021. Online sales grew particularly strongly. 65 % of sales came from the Dutch home market, FD reports. The Dutch business newspaper looked into the fashion retailer’s annual report and concludes that the fashion company seems to be over the sales decline caused by the corona pandemic.
That does not yet apply to profitability, though: net profit fell 80 %, from 41.8 to 7.9 million euros, due to higher costs. Labour costs were almost 23 million euros higher. WE also had to pay 3.2 million in profit tax, while a year earlier it recovered 5.6 million from the tax authorities.
Management points to very challenging market conditions, with consumer confidence reaching new lows since Russia’s invasion of Ukraine. Moreover, high inflation has eroded purchasing power.