WOLFORD ANNUAL SALES SLIDE BY 57%
PARIS — Due to investments in its distribution network and corporate infrastructure, Wolford said its before-tax operating profit slid 57 percent to $5.8 million for the fiscal year ended April 30.
Worldwide wholesale sales were up 6 percent to $132.54 million in the period, the Bregenz, Austria-based luxury hosiery and bodywear firm reported.
“If you spend money to build the business, you cannot expect to lower costs and turn a high profit in the same year,” Fritz Humer, chief executive officer, said in a statement. “We’ve made major investments in the business’s future that will add to its future success.”
Over the past four years, Wolford has invested $130 million in its business, Humer said. In February 1999, the firm bought back 21 franchise stores in the U.S. and recently spent $44 million to build a new factory in Bregenz, which will double its production capacity. It is scheduled to be fully operational by December.
“By the end of this calendar year, we will have finished our principal investments and next year will again start investing at a normal rate of 5 percent of sales per year,” Humer said.
Wolford pointed to the U.S., where sales rose 55 percent, and Japan, with a 76 percent increase, as markets that will play a key role in sales growth.
“Since we bought back our U.S. stores, we’ve been able to increase our profit, because we no longer have to wholesale to a middle man,” Humer said.
In Japan, the company plans to focus on building sales at its five company-owned stores and the 20 other doors in which it is sold.
Meanwhile, sales were up 51 percent in Eastern Europe and flat in Western Europe.
By product segment, Wolford said swimwear sales were up 37 percent and bodywear products were up 30 percent.