IC Companys makes some headway thanks to its premium brands and its Scandinavian activities

By

Olivier Guyot

Published
Aug 29, 2013

Faced with a challenging 2012/2013 fiscal year, IC Company had to rely on its activities in Scandinavia. The Danish group saw the percentage of its sales in Northern Europe climb to 72% of its total revenues for the fiscal year closing June 30, compared with 67% only a year earlier.

IC Companys reported revenues of 444 million euros (3.314 million Danish kroner), up 1%. Its results of operations were on the other hand down by 19% to 21 million euros. Its net results fell 16% to 15 million euros.

But the downturn could have been worse. The group separated from Jackpot and Cottonfield at the end of May and their poor results are not included in the numbers. These two brands saw a downturn of 11% in their activities, to 63 million euros and, at the end of the day, reported operating losses of more than 17 million euros (-101%).

Those losses would have put a significant strain on IC Companys’ results. Certainly, everything isn’t looking rosy for the remaining brands. The mid-market segment, including InWear, Part Two, Soaked and Matinique, experienced a particularly challenging fiscal year with revenues of 119 million euros, down by 11%, and an operating loss of 5 million euros, compared with the previous year’s profit of more than 5 million euros. The group explained that it is working on simplifying its network in this sector, even while focusing on its activities in Northern Europe to reduce costs. The group has consequently decided to restructure its teams and to close certain stores and showrooms.

Premium brands showed improvement
On the other side of the coin, the modest decline in the operating results in the Premium Contemporary sector (By Malene Birger and Tiger of Sweden) is a sign of the growing dynamic of these two brands. The group outlined investments that the brands had made to develop their networks. Tiger of Sweden opened in London, while By Malene Birger, under the guidance of its new CEO Charlotte Egelund, opened at Galerie du Palais Royal in the heart of Paris. These two brands reported a gain of 18% in their activities, up to 143 million euros, for an operating profit of 13 million euros. The brands notably reported a 13% increase in their retail sales over the comparable period.

The outdoor brand Peak Performance reported a 5% decline in its sales, to 125 The million euros, but experienced a very good fourth quarter, up 24%. The brand, which has been directed by Henrik Bunge for the past year, saw its operating results improve 25% compared to the prior fiscal year, thanks in particular to better supply management and improved inventory control.

The biggest surprise for the group came from the so-called “non-core” segment, its brands Saint-Tropez and Designers Remix. Their sales increased 3% to 58 million euros. But above all, their operating results went from 335,000 euros to more than 4 million euros.

For fiscal year 2013/2014, the Danish group expects growth in its Premium Contemporary brands, particularly in the retail development of the two brands, but also thanks to the arrival of the first collection of Tiger of Sweden accessories designed in-house. The men’s brand also hopes to gain market share in England and Germany, while By Malene Birger has signed distribution agreements in Japan and the Middle East. The situation of the mid-market brands forced the group directed by Mads Ryder to caution against expecting much revenue growth in 2013/2014.