Centralized settlements flowing through the international apparatus of Garant Schuh + Mode went up by 12.5 percent to €433.2 million in the first six months of 2011, as compared to the same period a year ago. They grew by 4.1 percent in Germany, by 7.3 percent in the Netherlands, by 18.1 percent in Belgium, by 44.0 percent in France, by 14.1 percent in Switzerland, by 8.9 percent in Austria, by 10.5 percent in Eastern Europe and by 4.7 percent in Scandinavia.

On a comparable basis, counting the same number of working days, centralized settlements grew by 8.5 percent. Still, the German-based buying group, which was taken over by Ariston-Nord-West-Ring one year ago, has good reasons to believe that its affiliated retailers gained market shares.

It estimates that the shoe market grew over the same period by only 2.7 percent in Germany, by 0.4 percent in the Netherlands, by 1.4 percent in Austria and by 7.4 percent in France, while declining by 0.4 percent in Belgium and by 1.2 percent in Switzerland.

On the other hand, the number of affiliated retailers grew strongly, and they placed more orders through Garant because of a widening range of suppliers with which the group has new contracts and new services introduced through ANWR. In Austria, France and the Netherlands, the retailers affiliated with Garand and ANWR were allowed to source merchandise from common product ranges.

The total number of retailers affiliated with Garant increased to 3,536, with 66 percent of them operating outside Germany, up from 3,496 a year ago. The number of affiliated stores increased to 5,374 from 5,306. In the first half of this year alone, 72 new retailers decided to join the group. France overtook the Netherlands as the second-largest market for Garant with a total of more than 720 retailers operating nearly 1,180 shops, 7 percent more so far this year.

The higher volume of products processed by the group allowed it to raise its net revenues by 4.3 percent to €28.9 million in the first half. However, the gross profit margin declined to 40.1 percent from 52.5 percent in the same period a year ago due to changes in provisions.

Operating earnings (Ebit) improved in France and the Netherlands, but overall, they declined to €1,412,000 from €2,388,000. However, the company had to pay a lot less interest thanks to the involvement of ANWR's own DZB bank as of last Jan. 1, so the net result was a profit of €890,000 for the period, up from €717,000 a year ago.

Going forward, the management expects to record a slight increase in centralized settlements for the full year, but while there will still be a profit, it will likely lie below the level of 2010. Another drop in earnings is expected for 2012. The management justifies these expectations with strengthening competition in certain markets and the termination of relations with retail partners that are not paying their dues. The criteria followed by Garant to determine the solvability of its retail partners may also make it more difficult to accept new ones.