Highlights
• Total group sales level at £410m, up 5% excluding Whistles.
• EBITDA up 6% to £33.4m (H1 FY2008: £31.5m) representing 8% of sales, up 8%
excluding Whistles.
• International sales up 14% to £79m (H1 FY2008: £69.5m) representing 19% of
group sales on a statutory basis, and over 25% at retail.
• E-commerce sales up 85% to £13.6m, representing over 3% of group sales.
• Margin up 0.7% to 62.2%
• Long term borrowings reduced by £40.4m to £334.0m (FY2008: £374.4m).
• Total number of company owned stores and concessions up from 1,723 to 1,760
(excluding Whistles).
One of the Group's key strategies is to expand rapidly in international markets
and this is delivering excellent results in tough economic conditions, with
over 25% of retail sales now generated from outside the UK. The Group trades
from 44 countries worldwide, opening in 7 new markets during the period
including Egypt, Latvia and Gibraltar. Karen Millen remains Mosaic's most
international brand, closely followed by Oasis; however Warehouse and
Principles are benefiting from the strong expertise in the Group with a fast
growing international portfolio, particularly in Europe and Russia. Meanwhile
Coast, having completed a successful trial in Bloomingdales in the Spring, is
opening in a further 20 Bloomingdales stores this season. With the outlook in
the UK remaining challenging, all brands are well positioned to increase their
international sales.
Another key strategic initiative has been to rapidly expand our e-commerce
proposition. Sales from this channel have grown by 85% from this time last
year and now represent over 3% of group sales. In addition to each brand's own
transactional website, Coast, Karen Millen, Oasis and Shoe Studio all
successfully trade on ASOS, maximising the opportunity to introduce new
customers to their brands.
Within the portfolio several brands have performed particularly strongly in
2008. The young fashion market remains more buoyant than other sectors and
Warehouse has performed well throughout the season with a very strong product
offer and solid organic growth as well as physical expansion in the UK and
abroad. Oasis, after a difficult year last year, has shown a significant
turnaround with the new team delivering substantial improvements to the range,
encapsulated by the successful launch of several sub-brands, including Floral
Frocks which generated significant media acclaim.
Karen Millen has had a very strong first half driven by excellent global
growth, with international retail sales now over 48% of the brand's turnover.
The last six months have seen the brand open a net 12 new international stores,
including the official launch of the US flagship in the prestigious SoHo
district of New York, and the launch of the Moscow flagship, the brand's 12th
store in the country. Karen Millen continues to extend its global reach,
opening in Azerbaijan, Jordan, Portugal and Romania so far this year.
In recognition of the challenging climate in the UK throughout 2008, Mosaic has
instigated a number of cost-saving programmes across the brands and shared
services, limiting the impact of increases in non controllable expenses on
store and head office costs. At the same time Mosaic has reduced long term
borrowings (including current portion) by £40.4m in the first half and by £95m
over the last 12 months.
Derek Lovelock, CEO Mosaic Fashions, commented:
‘Despite an increasingly difficult retail climate in the UK, I am delighted
with the improvement in Group performance. EBITDA is up 8%, excluding Whistles,
which we sold just before last year-end, and we are reaping the benefits of our
long-term strategy to build international brands. The work we have undertaken
to reduce our long term borrowings continues to deliver results and we have
seen an excellent outcome from our cost management programmes this year.
The start of the second half has shown no relief in terms of adverse market
conditions and the impact of the recent news from the financial markets on
consumer confidence cannot be underestimated. We remain very cautious of the
overall UK market for the remainder of FY 2009 and the whole of FY 2010, and
this, together with the impact of adverse exchange rate movements on margins,
means we anticipate a very tough time ahead for UK fashion retail. Nonetheless,
with the strength of our brands and our exposure to international markets, we
remain in a strong position to deliver improved performance through the second
half and into next year.'
Further Information
For further information on the results please contact the company's Investor
Relations Manager, Jessica Wilks on +44 20 7452 1122 or Gavin Anderson (Fergus
Wylie/Clotilde Gros +44 207 554 1400)
Information on Mosaic Fashions hf is available on the company website at
www.mosaic-fashions.is or www.mosaic-fashions.co.uk
