Macintosh Retail Group, parent company of Brantano, Scapino and other major shoe retail chains in the Netherlands, Belgium and the U.K., announced last week the elements of a new overall €180 million refinancing package, intended to strengthen its shoe formats and its omni-channel retail operations. It also announced an acceleration of its sales increases in the second quarter of this year, indicating that its new “Rebalancing for Profitable Growth” strategy is already proving successful.
After rising by 7.8 percent in the first quarter of 2014, its sales in the Fashion segment grew by 12.0 percent in the second quarter, building up to a total increase of 10.1 percent to €316 million for the first half the year. As sales declined by 3.5 percent to €89 million in its Living segment, which is due to be divested, the group's total revenues went up by 6.8 percent to €405 million in the first six months.
The group claims that its shoe retail operations performed better than the market in the first five months of this year: The shoe market grew by only 2.1 percent in the Netherlands, by 3.3 percent in Belgium and by 2.0 percent in the U.K., according to GfK and Kantar, but the sales of the chain belonging to the group increased in these three countries by 21.6 percent, by 5.8 percent and by 11.8 percent, respectively. Excluding the stores that are due to be shut down, its sales jumped by 24.4 percent, by 7.1 percent and by 13.3 percent.
As previously reported (see Shoe Intelligence, vol. 16-9+10 of May 20), the international Dutch-based group decided to close down a total of 158 “non-core” shops. Only 13 of them were shut down during the first six months of this year. On the other hand, the group refitted 47 Dolcis stores in the Netherlands, where it also opened ten new factory outlets, and it stepped up the collaboration between Scapino and Aktiesport, a local chain of sporting goods stores.
In the U.K., Brantano introduced more branded footwear as well as the “Clarks Fitting” process by iPad for children's shoes. The group's other British shoe retail banner, Jones Bootmaker, focused more on its own brand and raised the number of concessions at other retail stores from 24 to 28.
The results for the first half of this year will be available later this month, but they will probably show a seasonal operating loss of between €13 million and €14 million excluding extraordinary items, close to the loss of the first half of 2013. The management stressed that absolute costs are expected to increase markedly due to higher marketing expenditures and other factors.
Meanwhile, the group has added a new element to its €180 million refinancing package. It raised a few days ago €19.5 million in new equity through the issue of 2,434,254 new shares, representing 10 percent of the former capital, at a price of €8.00 per share. The shares were allocated to institutional and other qualified investors in the Netherlands and some other European countries through an accelerated book-building process coordinated by ING.
The newly appointed chief executive of the Dutch group, Kurt Staelens, its chief financial officer and its chief operating officer also pledged to subscribe to the offering for €100,000, demonstrating their confidence in the benefits of the new business plan of the group. With the new share issue, the capital of Macintosh Retail Group consists of 26,776,799 shares.
As part of the same financial package, major shareholders have committed to a €20 million subordinated loan, maturing in February 2018 at the latest. At the same time, the group's financing banks have agreed to open a revolving credit line of €140 million until January 2018, with most of the amount carrying interest of up to 4.5 percent over the Euribor rate.