German fashion group s.Oliver expects to return to profit in its financial year 2021, after losses in 2020 amounted to 60 million euros. Following a major reorganisation and pandemic write-offs, the group again believes in physical expansion.
Faith in stores restored
The forecast for this financial year is bright: although there have been some months where lockdowns have occurred, the company expects to return to profit again. The German group also takes pride in having survived the coronavirus crisis without external capital and having a solvency ratio of over 70 % to date.
Thanks to its solid financial structure, s.Oliver can now start reinvesting, German newspaper Main Post reports. The group from Bavaria wants to develop its collections faster, digitise further and make its brands more attractive. Last summer, the group took over the brand Copenhagen Studios. At the same time, s.Oliver continues to believe in the concept of physical retail: during the current year, the holding company opened several new stores, and the group also expanded into Russia and Serbia.
Covid cost of 75 million euros
Its financial year 2020, however, coloured a deep red: turnover fell by 21.3 % to about a billion euros, while profits plummeted to 60.5 million euros below zero. The company had to restructure and laid off 170 of its 1,500 employees at the headquarters. The coronavirus pandemic also reduced the value of many stocks and orders. Without these one-off costs (more than 75 million euros), the operating result would probably have ended 15 million euros above zero.
“In light of the Covid pandemic, the focus has been on the employees’ health, securing liquidity and stabilising the company”, the group says. They call the results “satisfactory” overall, as they significantly lightened the cost structure.
