The Rottendorf-based clothing group S.Oliver Group had to accept an operating loss in the three-digit million range in the 2022 financial year. Last year, however, it was possible to significantly reduce the deficit, the company said in a statement on Monday.
According to the key data that has now been published, the group of companies was able to achieve sales of around 1.08 billion euros in 2022. This corresponded to an increase of 19 percent compared to the previous year, in which the effects of the Covid-19 pandemic had a significant impact on demand. In the wholesale business, revenues grew by 22 percent to 394.0 million euros, while in the “vertical activities” they increased by 18 percent to 672.6 million euros.
However, operationally, the clothing supplier slipped deep into the red. After achieving positive earnings before interest and taxes (EBIT) of 2.6 million euros in 2021, the group had to accept an operating loss of 174.1 million euros in 2022. According to the company, the main reasons for this were “recurring disruptions in global supply chains, associated problems of late deliveries as well as high freight costs and write-downs on high inventory levels”.
Turnaround initiated: The operating loss was significantly reduced last year
According to its own statements, the clothing supplier was able to make progress again last year. Through “consistent cost management and a new strategic orientation,” the new group management succeeded in reducing the EBIT loss by around 135 million euros and initiating the “turnaround,” the company said. According to preliminary figures, the operating deficit amounted to 40 million euros in 2023.
“After the high losses in 2022, we had to change course quickly and decisively in order to stabilize the company,” emphasized Kai Bauknecht, who took over the position of Chief Financial Officer (CFO) in the summer of 2022. “We have achieved this by continually adjusting our cost structures in all business areas and reducing inventory by around 100 million euros, which has an impact on liquidity.”
Despite an “extremely difficult consumer environment and volatile market conditions,” the group will end 2023 “with a significantly positive cash flow from operating business and further reduce external financing,” Bauknecht explained in a statement.