Just two years ago, the Swiss textile group Calida Holding AG presented ambitious growth plans. However, because the desired successes did not materialize, the parent company of brands such as Calida, Aubade and Cosabella announced a change of course on Tuesday.
The group will focus on organic growth in the future
“After the growth strategy defined in 2021 did not deliver the planned business development, the Calida Group will focus on optimizing business with the existing profitable group brands over the next three years,” explained Felix Sulzberger, the executive chairman of the board of directors, in a statement. “By focusing on the operational excellence of our brands, our focus is on solid organic growth and an above-average EBIT margin in order to create added value for our customers, shareholders and employees.”
The group had previously aimed to grow through acquisitions in the laundry segment, among other things. But the plan didn’t work. The Cologne label Erlich Textil, which was acquired in the spring of last year, has long been up for sale again, and business is also going worse than planned for the US brand Cosabella, which was acquired a short time later.
High value adjustments at Cosabella – Onmyskin online shop is being discontinued
While Erlich Textil has already been written off and the final divestment is expected for the final quarter of the current year, the group is sticking with Cosabella – which is now causing additional pressure on earnings.
The company said that because business development was still “significantly behind the original business case,” write-downs of 33 to 43 million Swiss francs would be made on the brand. In addition, Cosabella incurred “additional expenses” of around six million Swiss francs in the current year. The group explained that the “optimization of the brand strategy and the consistent integration” of the label will now be “driven forward”. Silvia Campello, who was promoted to the brand’s new general manager at the end of August, will be involved.
The group also announced that it will discontinue the “loss-making” multi-brand online shop Onmyskin.com as part of its intended focus on e-commerce for its own brands. The company estimated the resulting “processing costs” at a total of around three million Swiss francs. “Various options for the takeover of Onmyskin.com by third parties are currently being examined,” the group said.
Management expects an annual loss due to special charges
Together with the value adjustments already recorded for Erlich Textil, the special charges now announced due to the value adjustments at Cosabella and the discontinuation of Onmyskin will contribute to the Calida Group ending the current financial year with a loss, the company said.
In the coming year, however, things should improve again due to the measures that have now been decided. “The new strategic orientation with the reduction of the brand portfolio, the abandonment of the development of group platforms and the focus on operational excellence will have the first positive effects on the earnings situation as early as 2024,” it said in a statement.