MQ CEO not satisfied with sales development

22 Dec '10

3 min read

MQ Holding AB, one of Sweden's leading branded fashion wear chains announced Interim Report 2010.

First quarter (September-November 2010)

• Net sales amounted to SEK 368 million (355), up 3.8 percent. Sales in comparable stores fell 1.0 percent.
• Gross margin was SEK 64.5 percent (64.7).
• Operating profit totalled SEK 54 million (46), representing an operating margin of 14.8 percent (13.1).
• Profit after tax amounted to SEK 38 million (19), or SEK 1.08 SEK (0.87) per share after dilution.
• Cash flow from operating activities totalled SEK 23 million (21).

Events during the first quarter

• Launch in Norway, with the first store in central Oslo – considerable publicity, and the venture is progressing as planned.
• Three new stores in Sweden – Bromma, Växjö and an outlet store at Kungens Kurva.
• Launch of MQ's e-trade unit as a supplement to the chain's 110 street stores.
• Recruitment of a design manager for the newly created position, effective 1 February 2011. The executive management team was strengthened with the inclusion of the Market Manager and Sales Manager during the quarter.

Events after the end of the reporting period

• MQ's second store in Norway opened in Drammen on 9 December 2010

Johan Elfner, CEO's statement The first quarter of 2010/2011 showed a 17 percent improvement in operating profit as a result of increased sales, retained high gross margin and good cost control. The increase in total sales during the quarter was driven by new stores. At the same time, like-for-like sales fell 1 percent.

Still, this was better than the Swedish fashion market as a whole which reported a 2.6 percent decline. Despite that we are not satisfied with the sales development, however we see that our efforts strengthening the offering - primarily in women's fashions - has begun to gain interest among consumers.

To further increase the company's competencies, the executive management team has been strengthened within design, market communication and sales. With the strengthened management, MQ will have a focused structure and a better position to create the most attractive brand-mix for men and women in the Nordic.

During the quarter, four new MQ-stores were opened; three in Sweden and one in Norway. A second store opened recently on the Norwegian market - this time in Drammen. The launch in Norway is progressing according to plan and we continue to see considerable potential in Norway.

Right now, the focus for MQ is to increase sales in existing stores while maintaining good cost control, as well as seize those opportunities identified for new openings in the market.

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MQ Holding AB

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