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Escada agrees to sell Primera GmbH at a loss
25 May '09
3 min read
ESCADA AG is about to complete the sales process started in December 2008 for the PRIMERA segment. At its meeting today the Supervisory Board approved the conclusion of agreements regarding the sale of the Münster-based PRIMERA Group. PRIMERA GmbH & Co. KG is a 100% percent subsidiary of ESCADA AG and comprises the labels apriori, BiBA, cavita and Laurèl. The corresponding contracts are set to be signed in the next few days. The details will be announced after conclusion of contracts.
The expected sales price necessitates another write-down of ESCADA AG's interest held in PRIMERA GmbH & Co. KG. As a consequence of this write-down the balance sheet loss already recognized in the Annual Financial Statement of ESCADA AG for fiscal year 2007/2008 now exceeds over half of the company's capital stock. This loss is in turn the result of the capital reduction resolved by the annual Shareholders' Meeting on April 28, 2009 not having been entered yet in the Commercial Register and thus is not effective at present.
Notwithstanding the already initiated restructuring program, the principles of which had been published in the Ad Hoc Disclosure of April 23, 2009, the Board of Management of ESCADA AG will convene a Shareholders' Meeting without delay and in accordance with Sect. 92 para. 1 of the German Stock Corporation Act in order to announce this loss to the meeting. The exact date for said Shareholders Meeting will be communicated in due course.
As expected the continued negative market environment meant that ESCADA AG's business performance over the first six months of the current fiscal year remained below the level of the previous year. Preliminary figures show half year sales of ESCADA Group and the discontinued PRIMERA operations together at 248.2 million euros, or 16.1% below the figure recorded for the same period the year before (April 30, 2008: 295.8 million euros), and thus in the lower range of expectations.
During the first six months of fiscal 2008/2009 ESCADA Group sales recorded a disproportionate decline by 23.9% year-on-year to 151.0 million euros due to the organisational separation of ESCADA and PRIMERA. Adjusted by this one-time effect, the sales for the ESCADA brand in the first six months of fiscal 2008/2009 totaled 146.5 million euros, or 18.1% under the comparable period of the previous year (April 30, 2008: 178.8 million euros).
The Group reports a preliminary half-year loss after taxes of 17.8 million euros (first six months 2007/2008: -6.0 million euros). After consideration of the discontinued operation PRIMERA and the valuation adjustment, the preliminary loss after taxes totals -91.7 million euros, after -8.0 million euros in the previous year period.
The Management Board's forecast for the full fiscal year still estimates sales for the ESCADA brand to decline by a lower double-digit percentage range. The negative effects this will have on earnings will be offset to some extent by cost savings. The Interim Annual Financial Statement for the first six months of fiscal 2008/2009 is due to be published in June.
The expected sales price necessitates another write-down of ESCADA AG's interest held in PRIMERA GmbH & Co. KG. As a consequence of this write-down the balance sheet loss already recognized in the Annual Financial Statement of ESCADA AG for fiscal year 2007/2008 now exceeds over half of the company's capital stock. This loss is in turn the result of the capital reduction resolved by the annual Shareholders' Meeting on April 28, 2009 not having been entered yet in the Commercial Register and thus is not effective at present.
Notwithstanding the already initiated restructuring program, the principles of which had been published in the Ad Hoc Disclosure of April 23, 2009, the Board of Management of ESCADA AG will convene a Shareholders' Meeting without delay and in accordance with Sect. 92 para. 1 of the German Stock Corporation Act in order to announce this loss to the meeting. The exact date for said Shareholders Meeting will be communicated in due course.
As expected the continued negative market environment meant that ESCADA AG's business performance over the first six months of the current fiscal year remained below the level of the previous year. Preliminary figures show half year sales of ESCADA Group and the discontinued PRIMERA operations together at 248.2 million euros, or 16.1% below the figure recorded for the same period the year before (April 30, 2008: 295.8 million euros), and thus in the lower range of expectations.
During the first six months of fiscal 2008/2009 ESCADA Group sales recorded a disproportionate decline by 23.9% year-on-year to 151.0 million euros due to the organisational separation of ESCADA and PRIMERA. Adjusted by this one-time effect, the sales for the ESCADA brand in the first six months of fiscal 2008/2009 totaled 146.5 million euros, or 18.1% under the comparable period of the previous year (April 30, 2008: 178.8 million euros).
The Group reports a preliminary half-year loss after taxes of 17.8 million euros (first six months 2007/2008: -6.0 million euros). After consideration of the discontinued operation PRIMERA and the valuation adjustment, the preliminary loss after taxes totals -91.7 million euros, after -8.0 million euros in the previous year period.
The Management Board's forecast for the full fiscal year still estimates sales for the ESCADA brand to decline by a lower double-digit percentage range. The negative effects this will have on earnings will be offset to some extent by cost savings. The Interim Annual Financial Statement for the first six months of fiscal 2008/2009 is due to be published in June.
ESCADA AG
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