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Odd Molly operating revenue decreases 22% in FY19

19
Feb '20
Pic: Odd Molly
Pic: Odd Molly
Odd Molly International, a Swedish company that designs and sells fashion and other lifestyle products for girls, posted 33 per cent decrease in operating revenue to SEK 43.9 million in fourth quarter (Q4) FY19, compared to same period prior year. For complete FY19, operating revenue fell 22 per cent to SEK 269.4 million compared to SEK 346.9 in FY18.  
 
The gross profit margin in the quarter that ended on December 31, 2019, was 33.4 per cent, reportedly affected by a more conservative valuation of remaining quantities of older merchandise in inventory.
 
The gross profit margin in FY19 was 46.5 per cent. 
 
The company's retail operations in Q4 decreased 35 per cent to SEK 24.3 million, reportedly affected by store closures, and also lower customer traffic and a lower degree of promotions and campaigns compared with the same period in 2018. Revenue from wholesale operations decreased 34 per cent year-over-year and in the fourth quarter amounted to SEK 19.0 million. The licensing segment generated revenue of SEK 0.3 million in the quarter. The recently acquired real estate company generated revenue of SEK 0.4 million since the acquisition closed on December 19.
 
Total operating revenue during the year amounted to SEK 269.4 million, a decrease of 22 per cent compared with the previous year. The company's retail operations decreased 20 per cent to SEK 160.9 million, reportedly due to store closures that were completed according to plan. Revenue from wholesale operations decreased 28 per cent to SEK 105.1 million. The licensing segment generated revenue of SEK 3.0 million during the year. The recently acquired real estate company generated revenue of SEK 0.4 million since the acquisition closed on December 19.
 
The company stated that the year 2019 was affected by the industry's continued transition to changing consumption patterns and new needs. For Odd Molly, this reportedly meant the implementation of planned efficiency improvements as well as new growth initiatives. The main line in their strategy is to focus on the core products, build the brand and continue the digital transition. In line with Odd Molly's action plan, they had cut the number of stores in half in 2019, significantly reduced the product assortment and lowered operating costs by about SEK 45 million during the year. At the same time, they had taken growth initiatives, including the licensing agreement with Hunkydory, which improve opportunities to utilise their strength as a brand.
 
In the future strategy, Odd Molly has stated that it will profitably grow by continuing to create inspiring collections, strengthening the brand and developing new and existing sales channels and models. At the end of 2018, Odd Molly reformulated its growth strategy to strengthen digital and international growth with lower costs, complexity and tied-up capital: Odd Molly will strengthen its brand position with more streamlined product range; Odd Molly will refine its channel strategy with a focus online - by increasing our own e-commerce and reducing the number of stores; Odd Molly will focus on international growth through a licensing model outside main strategic markets; and Odd Molly's organisation will maintain the highest quality, drive and engagement and be adapted to the company's long-term needs and growth.

Fibre2Fashion News Desk (JL)


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