Home / Knowledge / News / Apparel/Garments / Improved inventory situation at KappAhl
Improved inventory situation at KappAhl
Dec '11
KappAhl AB announced its report for first quarter 2011/2012.
• KappAhl's net sales for the period amounted to SEK 1,193 (1,341) million, a decrease of 11 per cent.
• The operating profit was SEK 16 (146) million.
• The gross margin was 58.4 (63.4) per cent and the operating margin was 1.3 (10.9) per cent.
• Profit/loss after tax was SEK -11 (95) million, which is equivalent to SEK -0.15 (1.27) per share.
• Cash flow from operating activities was SEK 30 (157) million.
• A rights issue of SEK 600 million was completed during the quarter.

CEO - Johan Åberg comments:-
The trend in the fourth quarter has largely continued during the autumn. Customers have been cautious, which we can see not only from our own figures, but also from visitor statistics from many shopping centres, and in financial statistics. At the same time our weak performance continues in the market, mainly due to our women's range. It will take one or more quarters before the improvement in the range has an impact.

It is worth noting that some of the measures taken are already having an effect. The cost savings can be seen clearly and we are starting to see positive changes in inventories.

It is a well-known fact that reducing inventories is a difficult balancing act, in that for a period you have to buy in less than you sell. Renewal of the range may suffer and clearance goods compete with the new arrivals. This has had a negative effect on earnings during the quarter.

Geographically we can note that the fast establishment rate in Poland and the Czech Republic is now clearly burdening earnings. As already communicated, expansion will be somewhat slower for some time to come.

In the last year the market for retail fashion has been increasingly weak. This is mainly due to consumers becoming more careful in their consumption. In the last year the media have been heavily coloured by negative economic news, which affects consumers' willingness to spend.

It is true that disposable income has developed well, but at the same time rising mortgage rates have taken part of the scope for consumption. In addition, according to HUI Research AB (HUI), more money has been spent on purchases of cars and services. Market development in the next year will probably continue to be weak.

Net sales and results
KappAhl's net sales for the quarter amounted to SEK 1,193 (1,341) million, a decrease of 11.0 per cent. This is explained by: the effect of new and closed stores, +3.2 per cent; change in comparable stores, -13.9 per cent and translation differences totalling -0.3 per cent. The weak sales are largely due to the women's range not meeting our customers' expectations. In comparable stores the trend is very weak.

Gross profit for the quarter was SEK 697 (850) million, which corresponds to a gross margin of 58.4 (63.4) per cent. The gross margin was negatively affected by the initially high inventory level leading to a higher than normal percentage of clearance sales, and by higher purchasing costs. The high percentage of clearance sales also means a negative impact on sales of new goods.

Must ReadView All

Courtesy: Aditya Birla

Textiles | On 20th Jun 2018

'Growth of VSF yarn industry is difficult'

Growth for the viscose filament yarn (VSF) yarn industry is...

Comfort USP of Sensitive Fabrics range of Eurojersey Spa

Apparel/Garments | On 20th Jun 2018

Comfort USP of Sensitive Fabrics range of Eurojersey Spa

Italian company Eurojersey Spa will present in 2019 new embossing...

Certification for Philippine garment firms availing GSP

Textiles | On 20th Jun 2018

Certification for Philippine garment firms availing GSP

The Philippines has adopted rules on securing certificate of...

Interviews View All

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Top executives
Textile industry, India

The event should be organised every year

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

John Kelley

Textile Events is one of the largest textile fair in the United Kingdom,...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Samar Firdos
Arvind Ltd

<b>Samar Firdos</b>, Chief Manager (Design) at Lifestyle Apparel Denim...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

June 2018

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

news category

Related Categories:

Advanced Search