DGAP-News: GERRY WEBER reports record sales and earnings for the first half of 2007/2008

Gerry Weber International AG / Half Year Results/Half Year Results

25.06.2008 

Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Disproportionate increase in profitability on double-digit sales growth
Pace of expansion accelerates

GERRY WEBER International AG continued its impressive performance in the
first half of 2007/2008, marking new records in sales and earnings. The
fashion and lifestyle company generated sales of EUR 268.5 million in the
first half of 2007/2008, which represented an increase of 13.4 percent on
the previous year’s EUR 236.7 million. All earnings figures increased at a
disproportionate rate. 'We once more accelerated our fast pace of growth
and boosted our sales and earnings growth rates as compared to the previous
year', said CEO Gerhard Weber. 'This performance once again demonstrated
our excellent business trend.' The 13.5 percent rise in incoming orders for
the three collections of the autumn/winter season 2008/2009 suggests that a
new sales record will be reached also for the year as a whole.

First-half earnings before interest, tax, depreciation and amortisation
(EBITDA) increased from EUR 25.3 million in the previous year to EUR 31.7
million in the current fiscal year, which represents an increase of 25.4
percent. Earnings before interest and tax (EBIT) climbed 24.9 percent from
EUR 20.8 million to EUR 26.0 million. At EUR 23.1 million, earnings before
tax (EBT) were up 24.0 percent on the previous year’s EUR 18.6 million. The
respective margins increased accordingly. Net profit for the period soared
49.2 percent from EUR 10.7 million to EUR 15.9 million. DVFA earnings per
share rose from EUR 0.45 to EUR 0.69. The strong increase in profitability
is attributable to the GERRY WEBER Group’s unique market positioning,
which, in turn, is the result of the company’s optimised processes, its
cost-efficient procurement structures and its flexible distribution system.
It is also due to the fact that GERRY WEBER enables its retail customers to
achieve the best possible results. GERRY WEBER is the No. 1 in sell-through
ratios and margins in the ladieswear retail sector. This enables retailers
to generate profits and encourages them to make more and more space
available to the company. The GERRY WEBER Group also benefited from
Germany’s corporate income tax reform.

Growth was again driven primarily by the company’s own retail activities
and the  GERRY WEBER core brand. At EUR 235.0 million, brand sales in the
first half of 2007/2008 were up 12.8 percent on the previous year’s EUR
208.3 million. The GERRY WEBER core brand generated revenues in an amount
of EUR 173.3 million, up 17.4 percent on the previous year’s EUR 147.6
million. Contributing 73.7 percent to total sales, the brand underlined its
importance for the Group. GERRY WEBER is one of the strongest brands in the
German fashion retail sector and scores name awareness ratings of roughly
80 percent with women aged 30 to 64. The success of the core brand is not
least attributable to the two sublabels, GERRY WEBER EDITION and G.W. The
GERRY WEBER EDITION single-item line achieved a 33.2 percent revenue
increase from EUR 37.0 million in the previous year to EUR 49.3 million in
the first six months of 2007/2008. Sales of the aggressively priced G.W.
label rose by 42.2 percent from EUR 6.4 million to EUR 9.1 million.

At EUR 47.7 million, sales of the younger TAIFUN label were up 4.1 percent
on the previous year’s EUR 45.8 million. The Group's second largest brand
contributed 20.3 percent to total brand revenues. The niche brand for plus
sizes, SAMOON, booked sales of EUR 14.0 million (previous year: EUR 14.9
million), accounting for 6.0 percent of total brand revenues.

A 23.1 percent increase in sales again made the retail operations the
fastest-growing segment of the GERRY WEBER Group. Retail revenues rose from
EUR 42.9 million in the previous year to EUR 52.8 million in the first six
months of 2007/2008, with the increase attributable both to the opening of
many new HOUSES OF GERRY WEBER and to sales growth in the existing stores.
In the first half of 2007/2008, the company opened 40 new HOUSES OF GERRY
WEBER, of which eleven are operated by the company itself. As of 30 April
2008, a total of 217 multi-brand stores were open for business worldwide,
including 97 in Germany. Aggregating the revenues of the 77 company-managed
HOUSES OF GERRY WEBER in Germany as well as the revenues of the foreign
distribution companies in the UK, Spain and Austria, the retail segment
allows the GERRY WEBER Group to implement the insights gained at the point
of sale more effectively to the benefit of both its retail partners and its
own stores.

As part of the GERRY WEBER Group’s expansion strategy, the number of
shop-in-shops also increased in the first six months of 2007/2008, namely
by 84 to 1,282. The stronger presence at the point of sale allows the GERRY
WEBER Group to further strengthen its market position vis-à-vis the retail
sector. A total of 300 new shop-in-shop outlets will be opened in the
current fiscal year, of which about one third will be located abroad.

The continued strong growth of the company was also reflected in its
headcount. As of 30 April 2008, the GERRY WEBER Group employed 2,166
people, 211 more than in the previous year. The new jobs were created
primarily in the retail segment, i.e. the HOUSES OF GERRY WEBER operated by
the company itself.

The excellent performance of the GERRY WEBER Group in the first six months
of 2007/2008 supports the company’s sales and earnings projections for the
full year. The sales target of EUR 575 million to EUR 580 million and the
projected EBIT margin of 11.0 percent show that the company aims for new
records. Moreover, the corporate income tax reform will lead to a
disproportionate increase in net profit. The GERRY WEBER Group projects
double-digit sales and earnings growth also for the financial year
2008/2009. Sales are expected to climb to EUR 1 billion over the next four
years, with the EBIT margin rising to 15 percent at the same time.

The active expansion of the company’s own retail activities will remain the
main growth driver. In the current financial year, a total of 90 HOUSES OF
GERRY WEBER are to be added to the Group’s network, half of which will be
company-operated with the other half being operated by franchisees. In each
of the ensuing four years, another 70 to 90 HOUSES OF GERRY WEBER are to be
opened. The GERRY WEBER Group’s medium-term goal is to sell approximately
40 percent of its products through company-operated or franchised HOUSES OF
GERRY WEBER.

The GERRY WEBER Group will also open new mono-brand stores and therefore
expects both TAIFUN and SAMOON to increase their sales revenues. The Group
also intends to expand and refine its online shop to boost its sales. 'We
want to gain exposure to our female customers wherever they prefer to spend
their time, i.e. not only downtown but increasingly also on the internet',
said Gerhard Weber.

In the coming years, the GERRY WEBER Group will make growing use of
concessions and supply arrangements based on previously agreed quantitative
limits. 'Going forward, we will support retailers even more effectively',
said the CEO. 'Today already, due to the good results with our products,
many retailers simply specify a certain quantitative limit and leave the
rest to us.' In a concession-based pilot project, a retailer achieved
approximately 30 percent same-space sales growth already in the first few
months. This strong increase is mainly due to the fact that the GERRY WEBER
Group staffs concession outlets with own, specially-trained employees and
is always fully informed about what happens at the point of sale due to the
EDI links of the 219 HOUSES OF GERRY WEBER.

The trust placed in the GERRY WEBER Group by the retail sector is key to
the company’s future growth. The company will therefore continue to offer
retailers higher mark-ups to allow them to generate good profits. 'Without
profits, retailers cannot be successful', Gerhard Weber concluded his
speech. 'We see our customers as our partners and will therefore support
them in a way which ensures that they will be successful in future.'

With a view to further strengthening its profitability, the GERRY WEBER
Group will continue to optimise its procurement and logistics structures.
The company plans to develop new production sites and to increase the share
of full-package service in relation to cut-make trim.
DGAP 25.06.2008 
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Language:     English
Issuer:       Gerry Weber International AG
              Neulehenstraße 8
              33790 Halle/Westfalen
              Deutschland
Phone:        +49 (0)5201 185-0
Fax:          +49 (0)5201 5857
E-mail:       h.kley@gerryweber.de
Internet:     www.gerryweber-ag.de
ISIN:         DE0003304101
WKN:          330410
Indices:      SDAX
Listed:       Regulierter Markt in Frankfurt (Prime Standard), Düsseldorf;
              Freiverkehr in Berlin, Stuttgart
End of News                                     DGAP News-Service
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