Groupe Lafuma said the structural changes in its markets and customer consumption patterns continued in the first half of 2019 - with a decline in physical store traffic and an increase in online activity - and it has made targeted investments to respond to these changes and improve the customers' shopping experience online.
Its turnover improved by 4.5 percent from the first half of 2018 to €86.9 million, while the operating income jumped by 11.1 percent to €3.0 million, reflecting an improvement in the gross margin of €1.3 million combined with higher investment in external expenses and personnel costs of €1.0 million. However, the group's net income declined by 11.1 percent to €1.9 million.
The distribution of the group's products was carried out to the tune of 79 percent by its wholesale network – up from 78 percent in the first half of 2018 - while 15.5 percent was done through the company's stores and factory outlets, and 5.5 percent through e-commerce.
The group's Surf division, which generates almost all of its revenues in France, continued to grow in the first half of 2019, gaining 3.4 percent to €14.7 million and resulting in a 6 percent increase in operating profit to €3.2 million. The Oxbow brand strengthened its visibility by increasing its presence in the Galeries Lafayette department stores. As of June 30, 2019, Oxbow generated 7.6 percent of its revenues through its own online shop.
The first half of the year is an important period for Lafuma's outdoor-oriented Furniture segment, as customers make the majority of their purchases of camping and garden furniture during this period. The division had a promising first quarter, but a weaker second quarter due to adverse weather conditions. It sales increased by 2.9 percent to €31.0 million.
Thanks to targeted measures, the division's operating profit increased by 5 percent to €10.4 million. The division focused on targeted international development and new market segments in order to reduce its dependence on the summer season. The “horizon” range, which is particularly aimed at cafés, hotels and restaurants, was well received during its presentation at the Milan Motor Show, and the “privilège” range is being expanded with the addition of accessories.
Overall, the group's sales of apparel were penalized during the period by both a wait-and-see attitude in the business climate and a particularly unpredictable weather, with a warm February and a cold month of May.
The first half of the year is seasonally weak for the larger Mountain Division of the group. In particular, its Eider brand generates most of the group's revenues in the second half of the year. Still, the Mountain Division showed good resilience during the period, growing by 4.7 percent in its domestic market and by 7.6 percent outside France. Japan stood out, with a 38.7 percent increase in sales, rewarding investments made both in retail and the rapid development of e-commerce. The Millet brand developed a capsule collection in cooperation with Yosuke Aizawa, the designer of White Mountaineering, which has received very favorable reviews from the international press. The Mountain division's operating profit contribution was stable at €6.2 million.
For the full year 2019, the management of Groupe Lafuma confirmed its objective of stable revenues as compared to 2018, coupled with slightly lower operating profits.