Austrian apparel retailer Wolford AG made strong progress in sales in the first half of fiscal 2022. However, due to adverse conditions, the legwear specialist from Bregenz had to record a significantly higher loss. This emerges from an interim report that the company published on Friday evening.
In the months from January to June, Wolford’s sales amounted to EUR 54.3 million, which corresponds to an increase of 29.4 percent compared to the same period last year. The company emphasized that the “like-for-like growth without license business” was even 40 percent. This is “a development that we haven’t seen in years”. The high increase in sales was due to strong growth in the USA and Europe, while business in Asia was impacted by the temporary lockdowns in China caused by the pandemic in the course of the first half of the year.
Higher costs weigh on the result
In terms of results, however, the situation is “still sober at the moment,” admitted Wolford. The operating loss (EBIT) grew by 14.4 percent to EUR 16.9 million compared to the first half of the previous year. The company cited cost increases as a reason, which resulted in part from macroeconomic conditions. “Driven by inflation and shortages on the procurement markets, the prices of fabrics, paper, energy and logistics rose, in some cases significantly,” the clothing supplier said.
In addition, the company had to post higher personnel costs and expenses “as part of the organizational and structural development of our organization for the future”. The bottom line was a net loss of 19.3 million euros. The shortfall thus grew by 48.2 percent compared to the corresponding prior-year level of EUR 13.0 million.
Wolford announces further austerity measures
In view of the persistently difficult framework conditions, “no improvement in the operating result (EBIT) for the year as a whole is to be expected,” explained Wolford. Therefore, “further measures must now be taken to increase operational efficiency by further optimizing processes and placing an even greater focus on cost control,” the company said.