Macintosh Retail Group reported a 12.4 percent increase to €323.8 million for the first half of this year in the revenues of its so-called Fashion retailing sector, including its numerous chains of shoe shops in the Benelux countries and the U.K., but the results were boosted by the acquisition of Jones Bootmaker in April 2011. On a comparable basis, the Fashion operations of the Dutch group rose by 3.1 percent, with poor results in April offset, to a limited extent, by a reasonable performance in May and June. The turnover generated by the online fashion business rose by 70 percent to €11.3 million.
The Fashion segment of the group comprises some 875 shoe stores trading in the Benelux region and the U.K. under the banners of Brantano, Dolcis, Invito, Jones Bootmaker, Manfield, PRO, Scapino and Steve Madden. The new online shoe retail platform Intreza and Nea International, which operates in the field of orthopedic braces, are also part of the Fashion business. After several divestitures, the group also has a “Living” sector consisting of furniture stores operating in the Netherlands and Belgium under the name Kwantum.
According to Macintosh, the market shares of its fashion formats remained stable or increased in the Netherlands, Belgium and the U.K. during the first half of 2012. In all three countries, the overall non-food retail market continued to decline after a difficult first quarter.
The Fashion segment had an operating loss (Ebit) of €5.9 million in the first six months of this year, compared with a positive operative result of €5.0 million in 2011, due to operating losses of €8.2 million related to Jones Bootmaker, the Steve Madden stores and the deployment of Intreza. Operating costs increased by €25.4 million in the first six months, and about 80 percent of the cost increase was due to these new activities.
As the management pointed out, in the shoe retail business, the first months of the year are traditionally loss-making, due mainly to winter clearance sales, and losses are usually made up for in the second quarter. Excluding new operations, the Fashion segment partially managed to do so, with a positive operating result of €2.3 million for the first half of 2012, compared with €5.3 million in 2011.
The operating result for Living was down by €1.5 million due to a drop in turnover, but it was still positive at €2.9 million. The operating result for the group landed at a €6.8 million loss.
The total number of stores operated by the group reached 993 by June 30, a net increase of 31 more compared with June 30, 2011, with 13 stores opened and six closed in the first half of 2012. Most of the newly opened stores were Brantano and Scapino stores. Eleven Scapino stores were converted and downsized as part of a new strategic alliance with a Dutch sporting goods retail chain, Aktiesport, that resulted in the opening of athletic shoe departments in the converted stores.
In another interesting move, starting next mnth, the group's new online shoe shop, Intreza.nl, will give the possibility to all its customers to pick up their orders free of charge at any of the 500 physical stores owned by the group.
The group's total turnover was up by 7.1 percent to €423.4 million in the first half, with the Living segment down by 7.3 percent because of market conditions. The gross margin for the group declined to 51.4 percent of turnover, compared with 51.7 percent in 2011, with a slight decrease in Fashion and a considerable increase in Living.
For the second half of 2012, market conditions are expected to remain poor according to the group, with some potential for improvement in shoe sales, should the weather be more favorable than in the autumn of 2011. In connection with ongoing market difficulties, which are not expected to improve in the near future, the group did not express any forecast about turnover, operating results or net profits for the second half of 2012, nor about 2012 as a whole. Traditionally, the group's financial performance is stronger in the second half.
The group said that the order backlog can no longer be considered as an adequate proxy to evaluate future sales and will stop its disclosure.