Year 2011 likely to be the year of the biggest investments – Marimekko
Marimekko Corporation, a leading Finnish textile and clothing design company announced annual report of 2010.
In 2010, Marimekko's net sales were EUR 73.3 million, of which international sales accounted for 29.4%. Marimekko products are sold in roughly 40 countries. The number of employees at the end of 2010 was 388. The year 2010 was productive for Marimekko. The Group's net sales grew slightly, but in spite of large investments in product development and international growth, profitability was up markedly, even more than was expected.
The improvement in profitability was influenced by a distinct increase in average sales margin, growth in wholesale sales, and increased royalty earnings. In Finland, net sales were down slightly, which was partly due to a decrease in revenues from individual promotions. The average sales margin and the pricing power of the brand were improved by, among other things, cutting down on price-driven promotions. In the trend in international sales, there was a clear change for the better and sales grew due to factors including the opening of new shops abroad.
Mika Ihamuotila CEO of Marimekko Corporation commented :
I was recently talking with the manager of a Marimekko store in the United States, and she told me that people drop into the store every day who say they come just to feel good – not intending to buy anything. Many people feel they can sense life at its most authentic in our shops, entirely devoid of pretence or any attempt to ingratiate. Marimekko's colours and patterns are said to bring joy in some wonderful way to ordinary workaday life.
In 2010, we once again launched many interesting new items, of which the new glass and ceramic tableware was given the most enthusiastic welcome. We felt these products already looked great on the drawing board, but their commercial success exceeded all our expectations. We also continued our internationalisation. In the United States, we put together an experienced team with solid knowledge of and expertise in local retailing. We founded a subsidiary and we opened a shop-inshop at the esteemed home furnishings retailer Crate and Barrel's SoHo store in New York City. South Korea's first Marimekko store opened in Seoul; in Europe, we opened retail shops of our own in Berlin, Germany, and Malmö, Sweden.
It was a productive year for Marimekko. In spite of large investments in product development and international growth, our profitability rose markedly. Our operating profit grew by 29.9% and reached EUR 8.2 million. An increase in average sales
margin had a major impact on this positive trend. Other factors bearing on the improvement in profits were growth in wholesale sales and increased royalty income. Our net sales were EUR 73.3 million, 1.1% up on the previous year.
In Finland, net sales declined by 1.8%, which was partly due to a downturn in income from individual promotions. By cutting down on price-driven promotions, we seek also in the future to boost the average sales margin and the pricing power of our brand. In the trend in our international sales, there was a clear change for the better last year: sales were up by 8.9% due to factors including the opening of new shops in various parts of the world.
I believe that we have now come to a stage at which we can and should have the courage to invest in future growth and the development of our company boldly, even if we may have to wait a little longer for the fruits of our work.
The year 2011 – our 60th anniversary year – is likely to be the year of the biggest investments in Marimekko's history so far. We intend to triple the output capacity of our textile printing factory and in this way to prepare for higher demand in the future. By investing in maintaining profitable in-house manufacturing in Finland, we are bucking a long-prevailing trend in our sector. The fact that our designers and our product development teams are able to work close to the manufacturing is an important competitive factor for us. I believe that this opportunity will make Marimekko an even more sought-after employer for designers and other industry professionals alike.
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