The Ara Shoes group reported that its Ara and Jenny brands achieved sales of about €182.4 million last year, a decline of 3.8 percent. This was attributed to a drop in international sales, caused by the rough market situation in Russia and some countries in Eastern Europe.
Ukraine and Romania were singled out as badly hit markets, because of their economic downturn as well as currency issues. On the other hand, Ara was satisfied with the brand's expansion through distributors in France and the U.K., where Ara enjoyed double-digit growth rates.
Sales outside Germany accounted for about 50 percent of Ara's turnover, a slightly reduced share. Ara's largest foreign market is Austria, where it has a subsidiary supervising offices and distribution in several other East European countries ? except Russia and Ukraine, which are handled from Germany. Next are Belgium, where Ara has been working for several decades with Swans; and the Netherlands, another country covered by a subsidiary. The company has several more sales offices in the U.S., Switzerland, Russia and four East European countries.
Ara's margins progressed last year, due to the fact that sales of Ara-branded footwear increased, while sales of the cheaper Jenny brand were off. The Ara brand is targeted at customers about 50 years old, focusing on fashionable comfort and retailing at an average of €89 per pair. A men's range was introduced a few years ago, although it still makes up less than 10 percent of sales. Jenny instead consists of a women's range carrying an average price of about €59 and targeted at more fashion-conscious customers from about 40 years.
For the upcoming winter season, Ara has adjusted its offering to differentiate its main brand more clearly from Jenny and from Salamander. The latter will be sold as a classic fashion brand, at a price slightly higher than Ara's. To clarify the segmentation, the company has reduced both its Ara and Jenny ranges by 50 models, to remove any overlaps.
Apart from about 3,200 multi-brand points of sale that carry its range, Ara is distributed in Germany through some 65 mono-brand stores run by independent retailers, and about 130 shop-in-shops. These two channels of distribution together made up 20 percent of Ara's sales last year. At the international level Ara has about 500 stores and shop-in-shops, including a few stores owned by Ara itself, for example in Poland and in Croatia.
The entire Ara group's turnover reached about €380 million for the year, including Lloyd and Salamander, but excluding minority interests in companies such as Legero. Lloyd said that its sales crept up by 0.1 percent for the year, in spite of a decline of 21.2 percent in its international sales, caused entirely by Eastern Europe. The collapse in markets like the Ukraine was particularly hurtful, since Lloyd's selling price is significantly higher in this country than in Germany. A foreign market that stood out was Austria, where Lloyd's sales rose by 5.8 percent for the year.
Run with a large degree of independence from Ara, Lloyd has adopted another strategy in terms of distribution so far. It has only 13 stores in Germany, seven of them owned by Lloyd and six by retail partners. It intends to expand this network, but declined to specify its targets in this respect. Women's footwear under the Lloyd brand is to hit the shelves in these mono-brand stores only in a few weeks' time.