ESCADA NET RISES 75%
Byline: Melissa Drier
DORNACH, Germany — The turnaround at Escada Group was further confirmed as the company released its results for the year ended Oct. 31.
Net profit for the group rose 75 percent to $19 million (28 million marks), and the net for Escada AG, the group’s German base, climbed 92 percent to $15.6 million (23 million marks). In fiscal 1994, group net was 16 million marks, and the net for Escada AG was 12 million marks.
Sales for the group gained 3.5 percent to $758.3 million (1.17 billion marks) from 1.13 billion marks, while sales at Escada AG were up 6.5 percent to $356.4 million (525 million marks), against 493 million marks a year ago. Sales were negatively affected by currency rate changes. Calculated at the prior year’s rates, group sales for fiscal 1995 would have been $835 million (1.23 billion marks).
The figures are closely in line with forecasts given by chairman Wolfgang Ley in a recent interview.
The improved net reflects reductions in fixed costs and improved turnover in established lines and line extensions, a company spokesman noted.
Further noting the effect of currency fluctuations, the company said its sales in the U.S. were up 13 percent in dollars, but the strength of the mark translated that gain into a 1 percent decline. Similarly in Italy, sales in local currency rose 17 percent but in marks were up only 2 percent.
Company officials further reported that the group’s stores posted a 5 percent sales gain for the year, up to $173.1 million (255 million marks), from 243 million marks. The company owns 129 stores.
Within the group, the Escada label continued to dominate turnover with a 49 percent share of sales. The cosmetics subsidiary, Escada Beaute, broke even this year, after having suffered an 8 million mark loss in 1994 and a 17 million mark loss in 1993. Laurel, which contributed 13 percent of group sales, had a loss last year, but after the line’s “successful relaunch, a double-digit sales gain is expected for fall 1996,” a spokesman said. Cerruti 1881 was cited as doing particularly well, having achieved an “almost double-digit” sales gain for the fiscal year.
Geographically, Germany continued to account for about 35 percent of group sales last year. Sales elsewhere in Europe represented 31 percent, against 33 percent a year earlier. North America generated 23 percent, against 25 percent.
The firm announced a boost in its annual dividend, with preferred shares getting $4.75 (seven marks), against four marks a year earlier, and common shares receiving $4.07 (six marks), against three marks a year ago.