Schiphol – 15 June 2020. As the operational situation has developed considerably since its first quarter 2020 press release of 5 May 2020, GrandVision N.V. (EURONEXT: GVNV) publishes an update on the impact of COVID-19 on its business.
Stephan Borchert, CEO of GrandVision said: “As governments started to ease measures aimed at containing the spread of COVID-19, we have seen sales improve considerably across many of our markets. As of 30 May 2020, approximately 4,700, or 80% of our own stores returned to full operation, including in most of our markets across Europe.
As reported on 5 May 2020, approximately 60% of GrandVision stores were closed in April and 40% were partially open but impacted by various degrees of sales limitations. Accordingly, GrandVision experienced in April 2020 a negative revenue impact of more than 80% compared to April 2019. As we were well prepared to re-open large parts of our store network as soon as possible, the negative year-over-year revenue impact reduced to approximately 55% in May. In the first week of June, sales of the fully opened stores were at 87% of last year, i.e. a decline of 13%, with a negative revenue impact of 20% for GrandVision’s total own store base.
Over the past months we have also seen the benefits of our sustained investments in our digital capabilities. E-commerce sales have grown by more than 80% in the first five months of the year, particularly driven by e-commerce sales through our banner websites with growth of almost 190%.
Looking ahead, we remain focused on preserving the integrity of the business, including protection of the safety and wellbeing of our employees and customers. The current developments we are seeing in our business reconfirm our confidence in the resilience and long-term prospects of our company. We recognize that there may be setbacks and further challenges, but we are confident that the inherent strength of our business will allow GrandVision to continue being a leading player in this market.“
Business Update
During May, most of GrandVision’s European markets started to re-open. A particularly strong recovery is currently seen in the Benelux, Germany, Austria, Switzerland and across most of the Nordics. In these markets, we are on good track to reach prior levels and lower store traffic is compensated by higher customer conversion as well as the expected catch-up effect after several weeks of store closures. Throughout the period, customers have shown great loyalty to our retail banners, with a significant portion of traffic coming through our CRM channels.
In Latin America, where countries have been impacted by COVID-19 a few weeks after Europe and North America, stores in most markets remain either closed or are operating with limited opening hours. The ramp-up of our stores across Latin America is also expected to lag behind other markets.
We have also started to observe some changes in customer behavior. Even after stores have started to re-open, e-commerce sales are staying at high levels as customers switched sales channels, particularly for contact lenses. Our investment in omnichannel capabilities is serving us well with a key role of our web-sites in preparing store visits and we benefit from a strong growth of online appointment bookings. In line with these developments, we have also further expanded our prescription glass e-commerce capabilities, which are now available through 12 banners in 8 countries, including Germany, France, Poland, Switzerland, Finland, and 3 more markets to launch in the coming months.
As a reflection of our business resilience, investments behind our strategic transformation and store network continue. With the recovery of our sales levels, GrandVision has taken all measures to enable full operation levels of its stores in the countries where possible. This includes staffing, marketing and tech center operations as well as continued investments in the company at our regular capex level of approximately 4-6% of sales. During the difficult COVID-19 times, we have experienced strong relationships with our stakeholders, including our employees for whom the furlough requests are now reducing, suppliers and landlords.
Financing Update
On 31 May 2020, GrandVision had a net debt of €842 million, versus a net debt position at the end of 1Q20 of €755 million. We continue to engage with our relationships banks and we remain confident in our ability to retain liquidity and secure additional funding, also in the event of a prolonged impact of COVID-19.
Status of transaction with EssilorLuxottica
GrandVision continues to support EssilorLuxottica with the shared objective to obtain regulatory approval for the closure of the acquisition by EssilorLuxottica of HAL's 76.72% interest in GrandVision within 12 to 24 months from the announcement date of 31 July 2019.
Outlook
Due to the dynamics and uncertainties of the COVID-19 developments, we continue to refrain from issuing a new outlook for the year 2020.
GrandVision will publish its second quarter and half year 2020 results on 5 August 2020.
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