The Swiss Calida group, which has gradually taken over 59.9 percent of the shares in the Lafuma Group, has managed to turn it around after many years of losses, following a major reorganization which is now largely completed.
Lafuma reached an operating profit of €1.5 billion for the first six months of its new financial year, ended June 30, against an operating loss of €54.2 million in the comparable 2013 period. Lafuma continued to suffer a small net loss of €0.5 million for the period, but it was much lower than the €60.0 million loss endured in the first half of 2013.
Improved operating results have been reported for the two outdoor-related branches of the reorganized Lafuma group. The Millet Mountain division saw its sales decline by 17.1 percent to €49.8 million, representing about 35 percent of the total turnover of Calida.
The drop was mainly due to the repositioning and reorganization of the Lafuma brand of outdoor products, whose operations have been transferred to Millet's office in Annecy., joining Millet and Eider The Lafuma collection and sales channels have been sharply streamlined.
The revenues of of Lafuma's camping and garden furniture division, which has remained at Anneyron, increased instead by 5.4 percent to €27.1 million, and they generated very positive results.
Even Oxbow, the surf-inspired lifestyle brand of Lafuma, which had become the group's biggest loss-maker, generated a profit in the first half of 2014 despite a drop in its revenues to €15.8 million from €19.4 million. Calida said that a simplified collection based on the brand's historical values was presented this year and was very well received. Distribution channels have been streamlined and contractual conditions with retailers have been renegotiated. Oxbow's new management team is working on a new strategy to put the brand on a sustainable and profitable footing, adds Calida.
By concentrating on higher-margin products and channels of distribution, the Lafuma group as a whole achieved a gross margin of 57.1 percent, 2.5 percentage points better than in the year-ago period. Operating cost were reduced by €6.8 million, including a €3.8 million cut in personnel expenses.
Thus, before accounting for one-off costs, Lafuma's operating earnings reached €6.5 million, compared with losses of €4.8 million. As previously reported in SGI Europe on Aug. 1, the Lafuma group's revenues fell by 11.2 percent to €85.5 million during the period, with a drop of 10.2 percent in local currencies.
Calida obtained majority control of Lafuma last December, and the reorganization of Lafuma led it to spend 8.6 million Swiss francs (€7.12m-$9.17m) in restructuring costs during the first half of this year. Its consolidation led Calida to book an increase of 110.6 percent in its revenues to CHF 197.4 million (€163.47m-$210.58m) for the period. Operating earnings before extraordinary items improved by 11 percent to CHF 9.1 million (€7.54m-$9.71m). Net earnings rose by 16.6 percent to CHF 5.2 million (€4.31m-$5.55m).