The Herford-based clothing group Ahlers AG recorded a decline in sales of -6 percent and 9.1 million euros to 142.5 million euros in the 2020/21 financial year, which the company attributes to corona-related burdens in the first eight months of the financial year and disrupted supply chains. Working from home also reduced the need for formal wear.
In the meantime, however, there is a significant improvement in earnings with the second to fourth quarters of 2021, which were better than in the previous year (despite the strong recovery in the second quarter, Ahlers had to lower its sales forecast). However, these cannot fully compensate for the pandemic-related drop in sales in the first quarter. The consolidated result rose by 9.6 million euros to -8.9 million euros, which reduced the company’s debt by 13.1 million euros.
Company struggled with corona restrictions
“Apparel retail in Germany and in most European countries was closed almost from the beginning of the past financial year. All in all, eight months of the 2020/2021 financial year were characterized by measures to contain the corona pandemic. Accordingly, we once again had to accept a drop in sales,” explained CEO Stella Ahlers when presenting the balance sheet for the 2020/21 financial year.
“Despite the drop in sales, the group result improved significantly thanks to significant cost reductions and, above all, the government bridging aid. The company’s debt was reduced. The forecast for the past financial year was clearly exceeded,” she added.
The group was able to save 2.5 million euros or 3 percent in operating expenses – mainly due to the first effects of the “New Tomorrow” performance program, further cost-cutting measures introduced at short notice and the lower wholesale sales due to the corona virus. They fell from 84.1 million euros to 81.6 million euros.
The company has a positive cash flow from operating activities of +6.3 million euros due to the reduction in net working capital. The balance sheet structure remains solid with an equity ratio of 46.6 percent compared to 45.5 percent in the previous year.
“As part of this performance program, we dealt intensively with the megatrends that are relevant for the entire clothing industry, such as digitization, e-commerce, sustainability and casualization. We have realigned the strategic and content-related alignment of our brands and their sales channels. The first noticeable changes could already be seen last summer during the order round for spring/summer 2022 and met with a very positive response. These changes will become visible to end consumers when the goods are delivered this spring in retail and e-commerce,” explains Stella Ahlers.
Ecommerce
As far as e-commerce is concerned, Ahlers recorded a strong increase in sales of 34.2 percent compared to the previous year, which is above the industry average of 20.7 percent.
“Both our own online shops and the marketplaces have contributed to this pleasing growth, with the marketplaces in particular being able to record an increase of over 40 percent. Sales in the company’s own retail business fell by 5.5 percent. Like-for-like, sales fell by one percent. The share of sales from own retail in total sales including the e-commerce business rose from 14.6 percent to 15.9 percent,” summarizes the group in a press release.
Outlook 2021/22
For the current 2021/22 financial year, the Group expects another corona-related transformation year and assumes Group sales of between EUR 180 and 195 million compared to the previous year of EUR 142.5 million if no longer, nationwide lockdowns are ordered and the delivery and normalize production chains again.
“In addition, a significant improvement in the operating result before special items (EBIT before special items) towards a low, single-digit, negative million amount (2020/21: -13.8 million euros) is expected. Special expenses and special income are likely to largely offset each other, so that although the consolidated result will be negative again in the third year of Corona, it should improve significantly compared to the previous year. The Management Board is therefore assuming a consolidated result of between EUR -2 and -5 million,” concludes the company.