Herning, Denmark, 2013-05-08 09:50 CEST (GLOBE NEWSWIRE) -- Owing to the difficult trading conditions that European retailers are still forced to contend with, orders to BoConcept's franchise chain did not live up to expectations in the fourth quarter of 2012/2013. Developments in France were especially disappointing in March, and the improvement seen in April was insufficient to compensate for this downward trend.
As a result of the revenue decline in the group's largest single market, revenue and profit for the year ended 30 April 2013 fell below budget. In line with the group's financial development in the 2012/2013 financial year, the management is making a downward adjustment of the group's guidance as follows:
- Approximately DKK 1,025 million in revenue, or zero growth, compared with the previously announced 2% growth.
- DKK 20 million in EBIT, including non-recurring costs of DKK 5 million (see below), corresponding to an EBIT percentage of 2% versus the previously announced 3.5%.
Cost-cutting measures affect executive board composition
To improve profitability in the face of the continued challenges imposed by the prevailing market conditions, BoConcept's management has decided to adjust the group's cost structure.
Adjustments will include shedding staff and support functions, for instance by consolidating finance and service tasks at the Danish head office. Furthermore, four of the group's own stores will be closed in Spain and one in Sweden, since they are no longer deemed to represent an attractive earnings potential.
One of the cost-cutting measures adopted by the supervisory board is to consolidate the responsibilities discharged by the executive board. The group has therefore concluded an agreement with Troels Dyrup Petersen to resign from his position as COO as of today. CEO Torben Paulin will assume overall responsibility for product development and sourcing, while CFO Hans Barslund will be in charge of production and logistics in future.
These measures will reduce the group's capacity costs by about DKK 10 million in the 2013/2014 financial year and by DKK 20 million on a full-year basis in the years ahead. Implementing the scheduled cost-cutting measures will result in non-recurring costs of about DKK 5 million for the 2012/2013 financial year and approximately DKK 5 million in the 2013/2014 financial year.
Improved earnings in 2013/2014 despite continued challenging market conditions
BoConcept's management expects the macro economic uncertainty and challenging market conditions for durable consumer goods in Europe to continue to prevail during the coming financial year. However, the launch of our exciting new collection and the implementation of aggressive promotional activities should ensure that BoConcept's revenue for the 2013/2014 financial year is on par with the revenue for the 2012/2013 financial year, and the cost-cutting measures should increase the EBIT percentage to about 3% after an anticipated negative foreign exchange effect of DKK 10 million and non-recurring costs for restructuring.
The management will provide a full and in-depth report of the group's development in the 2012/2013 financial year and the management's forecast in connection with the group's 2012/2013 annual report, which will be published on 26 June 2013.
For further information, please contact CEO Torben Paulin or CFO Hans Barslund, on tel. +45 7013 1366.
