Groupe Lafuma's mountain division was affected by unfavorable weather conditions and its decision to quit selling the Killy brand last year, but it became more efficient due to the integration of the three remaining brands into the Millet Mountain Group in Annecy – namely Lafuma, Millet and Eider.
The mountain division's sales were up by 2.9 percent to €102.3 million for the year, with increases of 6.1 percent for Millet and 9.7 percent for Lafuma, firming up the positive trend started in the second half of 2015. Eider's sales were down by 12.9 percent, amounting to a decline of €2.7 million, due to the discontinuation of the Killy brand. The mountain division's operating profit was up by 4.7 percent to €20.3 million, amounting to an operating margin of 19.8 percent, up by 0.3 percentage points.
The Lafuma group's garden furniture division raised its organic sales by 8.7 percent to €38.4 million. The weather wasn't as favorable last year as in 2015, but the division saw more demand in international markets and online.
Tensions in the action sports market and the downturn of tourism on French coasts affected the turnover of Oxbow, which makes about 90 percent of its sales in the country. The turnover in the surfing division of the Lafuma group suffered a 3.5 percent decline to €25.3 million last year, after a drop of 12 percent in 2015. However, rigorous cost-cutting measures enabled it to raise its operating profit by 8.7 percent to €5.1 million.
The whole Lafuma group saw its sales advance by 2.5 percent to €167.1 million for the year, aligned with the group's strategic plan. Its operating profit jumped by 25 percent but remained at the meager level of €3.8 million.
The improvement comes after the appointment of Reiner Pichler as chief executive of the Lafuma group and the Calida Group, the majority shareholder of the Lafuma group. His assignment for Lafuma is to secure the French group's operating profit in the short term and to support its multi-brand strategy in order to deliver sustainable growth for the years ahead.
These strategic changes have led the group to alter its approach in the U.S. market, as previously reported, to close down its office in Hong Kong and to restructure its Chinese factory. This caused one-off operating costs of €1.1 million. Adding a reversible provision of €2.6 million for depreciation, the French group ended the year with a loss of €1.3 million.
Another aspect of the strategic adjustments is that the Lafuma group wants to invest in the development of omni-channel retailing. These efforts could be supported by Calida's full acquisition of Reich Online Services, a German e-commerce specialist, which was announced at the end of February. Employing 75 people and generating a turnover of €14 million, Reich Online operates Calida's online store in Germany and the multi-brand underwear shop onmyskin.de.
The Lafuma group predicts that its operating profit will remain stable this year despite a small decline in sales, caused by the restructuring of its distribution in the U.S. and Hong Kong, and the sluggishness of the European market.
The Calida group, which owns the Lafuma group along with the Calida and Aubade brands of textile and lingerie, reported a sales increase of 3.3 percent to 370.9 million Swiss francs (€343.7m-$366.9m) for the year, which was a rise of 1.2 percent in constant currencies. The return on sales was unchanged as the Swiss company's operating profit went up by 3.3 percent to CHF 22.3 million (€20.7m-$22.1m).
However, the restructuring measures taken at the Millet Mountain Group generated one-off costs of CHF 4.0 million (€3.71m-$3.96m). The operating profit landed at €18.3 million and net income was reduced by 13.1 percent to CHF 14.8 million (€13.7m-$14.6m).
Calida's liquidity was affected by its acquisition of a minority stake of 11.6 percent in Lafuma, along with the French group's net loss and the investments implemented last year. However, owing to strong focus on the management of its working capital, Calida's liquidity was down slightly.
The Calida group's own shareholding changed last year as Veraison Capital purchased a stake of 16.3 percent from Micalux. This turned Veraison into Calida's second-largest shareholder after the Kellenberger family, which holds 34.7 percent of the Swiss group's shares. The Swiss group describes 2017 as a year of transition, with continued investments in sustainable organic expansion, but it predicts continued stable growth for the year.