(Filed Under wholesale Lingerie News). La Perla Fashion Holding N.V. sales fell 32.2%, while losses increased slightly during the first six months of 2019, as the recently consolidated company has taken a range of steps to reorganize, focus and strengthen its operations.
Sales fell to 40,314,000 euros (about $44.5 million at current exchange rates) in the six months ended June 30, 2019, down sharply from 59,487,000 euros (about $65.7 million) in the same period a year ago. Meanwhile, the company lost 46,712,000 euros (about $51.6 million) through June, up slightly from the loss of 45,478,000 euros in the first half of 2018.
La Perla noted that in the first half, “factors underlying the revenue decline include the effect of discontinued product categories, the reduction in selling space, production complications reducing the supply of fresh merchandise to stores and a decline in promotional activity. Gross margin benefited from the reduced promotional activity and supply chain rationalization. The reduction in sales, general, and administrative expenses was largely driven by the retail space rationalization and reduction in headcount. The small improvement in operating profit resulted from these factors.”
In little more than a decade the brand switched owners four different times. As of today it operates as a public limited company incorporated in Amsterdam. Since September its shares have been listed on the Paris Stock Exchange.
The brand was launched in 1954 by Ada Masotti, a corset maker in Bologna, Italy. In 2008 the family business was acquired by JH Partners, a private equity investor, and in 2013 sold again to Pacific Global Management, for 69 million euros. In early 2018 Tennor Holding B.V. (at the time named Sapinda Holding B.V.) acquired 100% of the shares in La Perla Global Management (UK) Limited. On the same date, La Perla Fashion Holding N.V. acquired 100% of the shares in La Perla Global Management (UK) Limited from Tennor, combining two components of the business into one.
Later in 2018 La Perla named Pascal Perrier (a Burberry executive with decades of luxury fashion experience) its CEO. In the first half of 2019, La Perla “issued 2,555,556 shares at a price of € 4.50 per share,” (in total 11,500,002 euros, or about $12.7 million) and reported that as of July, 2019 “the ultimate parent company is Tennor Holding B.V. which controlled 74% of the Company through La Perla Fashion Finance B.V.”
As of mid summer La Perla revealed it was selling through 70 boutiques “of which 44 were operated by the La Perla Operating Group and 26 were operated by third parties.” It added that 40 department stores were selling La Perla’s products “on the basis of concessions directly or via shop-in-shops and 24 outlets.” Its products are also sold through “various digital sales platforms, including the online shop “laperla.com” and third-party operated platforms.”
The number of boutiques has, apparently, been greatly reduced in recent years. In one of its financial disclosures, La Perla noted that it had had “150 directly operated stores by the end of 2016.”
In mid October, as it reported the results for the first half of 2019, La Perla noted that “after a challenging year in 2018, the Group has been implementing a restructuring program to transform its business. Restructuring activity included: simplifying and resizing La Perla’s organizational structure, including rationalizing its workforce; re-establishing its production and sourcing capability; streamlining La Perla’s points of sale in order to focus on high-potential locations; improving La Perla’s inventory management.”
The company added that it is “in the early stages of implementing its business revitalization strategy, which includes the following elements: modernizing the La Perla brand to engage a broader audience; revitalizing the product to be more relevant for today’s luxury consumer; bringing a digital mindset to all stages of La Perla’s consumer interaction; enhancing La Perla’s retail proposition; building operational excellence, which includes investment in back-of-house infrastructure.”
As part of its disclosures, La Perla has presented a “like for like combination” of the financials for the two entities, La Perla Global Management (UK) Limited and La Perla Fashion Holding N.V., as if they had been combined at the start of 2016 (instead of 2018).
That three year summary shows that combined La Perla sales dropped from 138,096,000 euros (about $152 million) in 2016, to 133,931,000 euros in 2017 and to 106,240,000 euros (about $117 million) in 2018. During the same period, the net earnings ranged from a loss of 72,924,000 euros (about $81 million) in 2016, to a loss of 187,850,000 euros (about $207 million) in 2017, to a net profit of 50,067,000 euros (about $55 million) in the full year 2018. — NM
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