Marimekko Group's net sales grow 13.1% in H1 FY'12

The forecast for the whole of 2012 remains unchanged: the Marimekko Group's net sales are estimated to grow by over 10% and operating profit is forecast to at least double. The increased share of retail sales adds to the seasonality of the business, and thus the operating profit will be generated entirely in the second half of the year.

Mika Ihamuotila, President and CEO said: “I am pleased that our recent efforts are now showing up in the form of strong growth in net sales even in the current, challenging state of the market. Our internationalization has also proceeded rapidly. For the first time in the company’s history, the majority of brand sales of our products were generated outside Finland.

“The strategic decision we made the year before last to invest more in opening new, company-owned stores appears to have been correct. Similarly, our decision to be cautious in Central Europe and especially in Southern Europe and instead to devote effort to growth in East Asia and the United States in particular has also proved correct. Our growth in net sales in these regions was very robust in the first half of the year; sales in the Asia-Pacific region rose by 35.7% and in North America by 60.9%.

“The challenging state of the economy has also made itself felt in the form of cautious purchasing behavior among consumers in Scandinavia. However, we have unwaveringly expanded our network of stores and we can already see that this is bearing fruit. During the period under review, we opened two company-owned stores in Sweden.

“Our operating result was, as expected, in the red during the first half of the year. Our net sales were seasonally low in relation to operating expenses, as profits from retail sales operations are generated predominantly in the last quarter of the year. Since a larger share of our net sales is generated by retail sales, this trend is likely to continue in the future.

“The second-quarter operating result and particularly the cash flow from operating activities were better than last year. I am also pleased that we were able in the second quarter simultaneously to reduce our stocks and to improve the sales margins of both wholesale and the company-owned stores.

“The Hong Kong store opened in May has been given an excellent reception and this encourages us to continue our investments in growth in the Asia-Pacific region. Our stores in the United States have also performed so well that we are continuing to expand our network of company-owned stores in this market, which is strategically important for us.

“Last week we opened a company-owned store in Boston and we will also open new ones later this year in Beverly Hills (L.A.) and Palo Alto in the heart of Silicon Valley. Our new products have been enthusiastically received internationally, and we will launch more new products and categories in the near future."

Marimekko