The net profit of this international shoe retailer grew to €5.7 million last year, as compared to €0.3 million in 2002. The rescheduling of its loans and the generation of €38.5 million in free cash flow allowed Brantano to reduce its net debt position from €89.5 million to €53.9 million in the course of the year, leading to an improvement in the debt/equity ratio from 172 to 104 percent.

The company has decided to change the accounting rules for the valuation of inventories, making them more comparable with those of other national and international shoe and clothing retailers. Stock is now being valued at the acquisition cost. If the purchase price is higher than the net realizable value, it’s readjusted on the basis of that value after sales-related costs. Financial discounts obtained from suppliers for cash payments are thus no longer viewed as financial income, but they are applied to inventories. Based on the new rules, Brantano’s gross margin came out at 48.2 percent last year, well ahead of the 2002 level of 46.3 percent.

The new accounting rules also lifted operating earnings by €2.7 million. They reached €15.9 million or 5.2 percent of sales, as compared to €3.0 million or 1.0 percent of sales in the previous year, but the outlook for this year calls for an operating profit of only between €13 million and €15 million because of limited growth in the market and the negative impact of the depreciation of the pound sterling.

A total of 12 new Extraordinary items led to a net pre-tax gain of €0.8 million last year, versus an extraordinary loss of €0.1 million in 2002.store openings are planned for this year, including 10 in the UK alone. Two others should be opened in Belgium. Last year, the total number of stores increased by 18 to a total of 313.