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KappAhl posts very weak result
01
Oct '11
KappAhl announce its full year report for 2010-2011.

Fourth quarter (June 2011 - August 2011)
• KappAhl's net sales for the period amounted to SEK 1,208 (1,290) million, a decrease of 6.4 per cent.
• The operating profit was SEK 3 (156) million.
• The gross margin was 54.0 (59.6) per cent and the operating margin was 0.2 (12.1) per cent.
• Profit after tax was SEK -54 (125) million, which is equivalent to SEK -0.72 (1.67) per share.
• Cash flow from operating activities was SEK -97 (222) million.

Full year (September 2010 - August 2011)
• KappAhl's net sales for the period amounted to SEK 4,974 (5,111) million, a decrease of 2.7 per cent.
• The operating profit was SEK 222 (551) million.
• The gross margin was 58.8 (61.8) per cent and the operating margin was 4.5 (10.8) per cent.
• Profit after tax was SEK 68 (402) million, which is equivalent to SEK 0.91 (5.36) per share.
• Cash flow from operating activities was SEK 95 (507) million.
• New three-year bank agreement.

CEO's Christian W. Jansson, President and Chief Executive Officer comments
We have delivered a weak offer in a weak market. Our range has not sufficiently met our customers' expectations. So we are making a new start as regards our existing customers' needs to ensure that we have them in focus going forward. We must be proud of our customer base and it has great potential for further development. It has been our strength historically and as we look forward there is much to indicate that it will continue to be so. Strategically we do not see that anything has changed for our concept.

We have not been satisfied with the inventory control in the past year. We were too optimistic regarding purchases and too late in running down inventories. During the quarter the composition of inventories has improved but we have more to do before we are content.

We have also negotiated a new loan agreement and the Board of Directors has proposed a new share issue of SEK 600 million.

KappAhl has all the essentials for being successful again but we will probably have to struggle with a weak market for some time.

KappAhl is a leading fashion chain with 370 stores and 4 800 employees in Sweden, Norway, Finland, Poland and the Czech Republic. KappAhl sells value-for- money fashion with a wide appeal - to women, men and children - and focuses in particular on women aged 30-50 with families. All clothes are from our own designers. KappAhl was the first fashion chain in the world to achieve environmental certification in 1999.

KappAhl

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