Marimekko Q1 net sales decline 6% to €19.4mn

09 May '14

5 min read

“Our earnings trend is typically weak in the first quarter of the year as net sales are seasonally low relative to operating expenses. However, our operating result excluding nonrecurring items was an improvement on the figure for the same period in the previous year due to action taken last year to enhance profitability.

"Our wholesale sales were down by just over 10 percent, which is partly explained by a change in the delivery rhythm for the spring collection. Contrary to the previous practice, a large proportion of the deliveries were made as early as December. Low confidence in the retail trade trend and in consumer purchasing power is also reflected in retailers' caution as they replenish their stocks.

“The early months of 2014 have been an eventful time for Marimekko. The consultative negotiations which ended in March and our more efficient organisational structure enable us to strengthen our competitiveness in the long term and to develop our operations in such a way that we will be able in the future to respond even better to the challenges of a changing business climate and the needs of our international clientele. In spite of the difficult state of the global economy, in the past five years we have built Marimekko into a global design company with already more than 130 stores in Asia, Europe and North America. We are now moving on to the next stage in our strategy and we are updating processes related in particular to design, product development and procurement.

“In order to strengthen the international competitiveness of our design management, we decided in February 2014 to initiate an international recruitment process for a new Creative Director. After the end of the period under review, we reported that Anna Teurnell, who is currently Head of Design for the & Other Stories brand, has been appointed to be Marimekko's Creative Director and member of the Management Group as of 15 July 2014.

"At the heart of our updating process are even more attractive products and getting them from the drawing board and into the stores faster and more easily. I believe that Anna Teurnell's artistic vision, international experience and Nordic background are a good combination that is sure to be of help in achieving our ambitious goals.

“In consumers’ purchasing behaviour, a great transformation is currently taking place as a result of digitisation, and the development of multichannel business is of crucial importance to Marimekko as to others. Ecommerce continues steadily to expand its share of total sales, and we are seeking all the time to enhance consumers' shopping experience both online and in our stores.”

Financial guidance is unchanged

The forecast for the whole of 2014 remains unchanged: On the basis of general market prospects, the company's growth targets and the agreed reorganisations, the net sales of the Marimekko Group in 2014 are forecast to grow by 3-8 percent relative to 2013. Operating profit excluding nonrecurring items is estimated at EUR 4-8 million.

Marimekko Corporation

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