Home / Knowledge / News / Apparel/Garments / Sales slowdown due to global recession, Billabong
Sales slowdown due to global recession, Billabong
19
Dec '11
At the time of its Annual General Meeting (AGM) in October, the Billabong International Limited indicated that Group sales revenue in the three months to 30 September 2011 was up 24.7% in constant currency terms (up 6.2% adjusting for the impact of acquisitions) compared to the prior corresponding period (pcp) and the business anticipated strong underlying EBITDA growth compared to the pcp in constant currency terms in the 2011-12 financial year.

At the announcement of the 2010-11 financial year results in August and again at the AGM, the Company also stressed the magnitude of the December and June trading months to the Group's overall results for the 2011-12 financial year.

Following receipt and finalisation of management accounts reflecting actual trading results for the month of November and receipt of preliminary retail sales data for company owned stores for the period ended 11 December, the sales growth trend has deteriorated significantly in this critical retail period.

Based on preliminary sales data to 11 December and assuming a continuation of current trends, it is now anticipated that sales revenue for the six months to 31 December will be approximately 5% higher than the pcp in constant currency terms (down approximately 3% adjusting for the impact of acquisitions).

The reasons for the sales slowdown vary by region, but the data received reflects the European sovereign debt issues and the ensuing fears of global recession which are impacting consumer confidence and spending patterns significantly. Within the key regions:

• The Group's European company owned retail stores, which were showing slightly positive comparable store sales growth to the end of October, declined sharply in November after a positive start to the month and this downward trend continued into the first week of December.

• With the lower sell through from the late start to winter and limited snowfalls, European retailers are pushing back early summer December deliveries to later in the year. While it is expected the Group will deliver the majority of these summer forward orders in the second half, the later deliveries may result in lower in-season repeats.

• In Australia, while there was some sales improvement following the November fall in interest rates, sales in the latter part of the month were significantly affected by unseasonally cold summer weather, particularly in New South Wales. The poor weather has continued into December and is reflected in same store sales declines.

• With respect to North America, the Group's business in the USA has continued to perform well, with good like-for-like sales growth in October and November but turning negative in the first two weeks of December on growing global concerns about Europe. Challenging trading conditions remain in Canada, in both wholesale and retail.

Overall, Europe is by far the Group's most challenging market, followed by Australia. The slower global sales come as the general market environment has become highly promotional and this is placing pressure on gross margins. Much of the consequent loss of gross profit is leading to a reduction in EBITDA given the limited ability to reduce the relatively fixed cost base in the short term.


Must ReadView All

Serbian economy minister Goran Knezevic (left) and Taypa president Mesut Toprak after signing the MoU. Courtesy: Serbian Government/SeeNews

Textiles | On 20th Oct 2017

Turkish group Taypa to build textile factory in Serbia

Turkish textile group Taypa will invest euro 35 million ($41.2...

China’s textile & apparel exports rise 4.3% in Sept ’17

Textiles | On 20th Oct 2017

China’s textile & apparel exports rise 4.3% in Sept ’17

Registering an increase of 4.3 per cent year-on-year, the exports of...

Courtesy: Messe Frankfurt

Textiles | On 20th Oct 2017

Heimtextil to focus on textile solutions for architects

Heimtextil 2018, world's leading trade fair for home and contract...

Interviews View All

Headhonchos
Indian fashion industry

Cotton consumption will keep growing in the Indian fashion industry

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
77.9%
No
13.2%
Skip
8.8%

Total Votes: 68

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
27.9%
Skip
10.3%

Total Votes: 68

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.3%
No
10.3%
Skip
4.4%

Total Votes: 68

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
75.0%
No
11.8%
Skip
13.2%

Total Votes: 68


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search