DENMARK: IC Companys to sell brands after H1 profit hit
- Company to sell off Jackpot and Cottonfield brands
- H1 revenue down 3% to DKK2.04bn
- CEO expects challenging market conditions
Danish fashion firm IC Companys is to sell off its Jackpot and Cottonfield brands and restructure its business into three divisions after reporting a decline in first-half sales.
IC Companys said the two brands have posted "substantial losses" in recent years. The move means its brand portfolio has changed from 11 brands to three clearly defined business segments.
"By setting up three business segments and divesting the brands Jackpot and Cottonfield, we continue the path of simplifying the group in order to enhance its growth and earnings capacity," explained IC Companys CEO Niels Mikkelsen.
Revenue in the first-half slipped 3% to DKK2.04bn (US$361.4m) compared to the same period last year, while gross margin improved by 1.4 percentage points. IC Companys said its performance was "as expected," adding that it has launched new strategic initiatives to support revenue growth and enhanced earnings.
The fast fashion division saw sales increase 15% to DKK 231m from DKK201m the year before, while premium segment sales edged up 1% to DKK1.14bn against DKK1.12bn last year.
However sales in the mid-market business, which includes the Jackpot and Cottonfield brands, declined 15% to DKK668m, compared to DKK783m the prior year.
Looking forward, IC Companys said it expects challenging market conditions for the 2012/2013 financial year to continue to affect the mid-market division. However gross margin pressure is likely to abate and cost-saving measures will continue.
Excluding the possible effects of the strategic initiatives, full-year revenue is set to range from DKK3.70bn-DKK3.75bn.
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