Delta Galil’s sales last year set a company record and it’s looking to only increase the growth rate, as well as profitability.
For the year ended Dec. 31, Israel-based Delta increased overall sales by 16 percent to $1.37 billion from $1.18 billion in 2016, and while profits dipped slightly to $48.96 million from $51.9 million, chief executive officer Isaac Dabah said the company is going strong and still looking for brand additions.
“Our balance sheet is quite strong, we have cash and we’re always looking for something that we’re able to acquire, but we’re very specific and very conservative,” Dabah said.
Asked if Nautica, which VF recently put up for sale again, was a brand of interest, Dabah said his company is veering more toward activewear and intimates.
“That’s our strength,” the ceo added. “Seven For All Mankind was really an aberration for us. The core of the business is much more focused on intimates, but were open to looking [at other types of brands].”
But that’s not to say Seven hasn’t been a positive for the company. Dabah attributed Delta’s overall sales growth to its mid-2016 acquisition of Splendid, Ella Moss and Seven from VF Corp. Splendid and Seven in particular have been doing well and in 2017 saw comparable sales get into positive territory for the first time in several years. Meanwhile, Ella Moss was turned profitable by making it into a licensing business, according to Dabah.
The integration of these brands also led to some serious cost-cutting last year. Corporate headcount at the three brands was cut to 316 from 600 and 13 stores were closed, with another 10 closures set for this year.
The U.S. market has been one point of difficulty for Delta, where sales dipped 5 percent last year, in spite of the company’s efforts.
Business is never easy, especially in the U.S., and we had hoped to do even better last year, but we still had a great year…in general profits were the same,” Dabah said.
He added that sales and retail in the U.S. is showing signs of stabilizing, but trends in Europe are improving as well.
Looking ahead, Delta wants its new premium brands group to keep increasing sales by midsingle digits, with a focus on e-commerce sales, which doubled last year through Delta’s owned sites, and grew by 45 percent on third-party pure players like Amazon, where the company is eager to increase its business.
The company is also set to expand its offering within Splendid and Seven (yoga and sleepwear for Splendid, a more complete ready-to-wear offering for Seven) this year and will be launching a marketing campaign in March to support it. Delta will also be holding a fashion presentation Tuesday for analysts and investors, to “share the growth engines for 2018,” Dabah said.
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