Wedins Skor & Accessoarer has reported a net loss of SEK 52.0 million (e5.65m-$6.84m) for the nine months up to May 31, a sharp improvement from the net loss of SEK 187.4 million recorded for the same period the previous year, which included extraordinary items. Sales fell by 9.2 percent to SEK 720.5 million (e78.3m-$94.9m) from SEK 793.1 million. Gross profit margins rose to 56.2 percent, up from 50.3 percent.
According to official retail statistics, footwear sales in Sweden decreased by just over 2 percent on a comparable basis from last September to last May. Roland Nilsson, Wedins’ president and CEO, blames slow market conditions and falling prices for the continuously negative results, but says the group suffered also from a 10 percent drop in the Norwegian krone and from the fact that it operates a lower number of stores.
The Swedish shoe and accessories retailer, which operates 202 stores in the Nordic countries, is revamping the price and product mix to increase profitability. Stores that have already introduced a harmonized assortment of shoes and accessories are performing better, while Rizzo, the more fashionable label, continues to develop well.
The acquisition of Sko-City’s 9 stores in June – they will be taken over in August and later rebranded under the Wedins banner – is hoped to boost profitability and contribute an additional annual turnover of around SEK 90 million (e9.8m-$10m). In a move to concentrate on larger stores, 5 units were closed during the period, one was opened and 5 were rebuilt, while on March 3 new flagship stores were opened in Stockholm, Oslo and Helsinki.
A new data processing platform to improve the product range, planning and efficiency is being tested and will be fully operational from the 1st quarter of the next fiscal year. Other changes include integrating the group’s inventories into a single shared warehouse in Sweden from next January. Rizzo’s inventory was moved last June and the Norwegian inventory will follow suit by the end of the year. The combined changes are intended to enable the company to reach a net profit margin of 5-6 percent in 2 to 4 years’ time.