Sales Dip At Aubade, Calida As Parent Grows

The declining share of lingerie sales at Calida Holding is reflected on the covers of the 2013 (left) and 2014 (right) annual reports.

2014 sales dropped slightly at both Calida and Aubade, the underwear and intimate apparel divisions of Calida Holding AG, as the Switzerland-based parent company completed its majority takeover of the Lafuma Group, a producer of surfing, skiing, climbing and other outdoor products.

Net sales for all divisions of Calida Holding doubled to 412.4 million Swiss francs (CHF) (about $424.4 million at today’s exchange rate) from 206.4 million CHF in 2013, while net income more than doubled to 23.6 million CHF (about $24.2 million) from 10.6 million CHF. As of 2014, underwear and intimate apparel represent slightly less than half of sales at the firm (at 203.3 million CHF) and the change was reflected on the cover of the 2014 Calida Holding annual report which depicted a mountaineer, thousands of feet up, fighting to maintain his balance atop an icy peak. Last year the cover depicted a model in lingerie, garter belt and hose standing on a far less precarious flight of sun filled steps.

At the Calida division 2014 sales dropped to 137,753,000 CHF (about $141.8 million) from 138,718,000 CHF the year before, but “operating profit contribution” rose to 39,193,000 CHF (about $40.3 million) from 38,977,000 CHF in 2013.

At the Aubade division, sales in 2014 dropped to 65,536,000 CHF (about $67.4 million) from 67,669,000 the year before. In addition, “operating profit contribution” also fell, to 18,077,000 CHF (about $18.6 million), from 19,256,000 CHF in 2013.

“Although the traditional brands CalIda and Aubade were, as expected, unable to match the excellent sales and income figures of the prior year, the CalIda Group still managed to generate strong growth in the fiscal year 2014 thanks to the above-plan development of all three divisions in the newly acquired Lafuma Group,” explained Dr. Thomas Lustenberger, chairman, and Felix Sulzberger, CEO, in a letter at the front of the annual report.

“Following a strong first half year, which saw sales grow by 1.5 percent, consumer demand tailed off in the second half,” the executives wrote, in describing results at the Calida division. “Overall and adjusted for currency effects, a very modest increase of 0.6 percent was reported at year-end. Like-for-like growth of 2.2 percent was generated in our own stores, while direct internet sales increased by 71.9 percent to CHF 2.4 million and outlet store sales were up 11.3 percent to CHF 10.9 million. The positive development of our own sales channels compensated for a further slowdown in wholesale. The wholesale business with retailers and department stores once again declined in the reporting period. Traditional retail sales were stable in the CalIda brand’s key markets, Switzerland and Germany, where over 80% of sales are generated. Department store sales dropped, however. The export markets exhibited steady development.”

Lustenberger and Sulzberger discussed the drop in sales at Aubade. “This is mainly attributable to the weak consumer environment in the primary market, France, and in the major export markets of Europe and Japan. Our own direct sales channels generated like-for-like growth (of 0.6 percent with Aubade boutiques, 10.8 percent with outlets and 47.3 percent with direct internet sales) and proved to be an important stabilizing influence on sales. This development was not enough to compensate entirely for the fall in wholesale sales, however. Wholesale sales were down equally in France and the export markets as a result of structural factors. Specialist stores have been losing ground for many years and we have to focus consistently on direct sales to our customers.”

The Calida executives continued, noting that “Retail, outlet and internet sales channels already account for 41.9 percent of Aubade sales. The profitability of the retail business has been an important operating focus at Aubade in recent years, and the brand has virtually reached the desired level at its French stores thanks to ongoing optimization of the inventory control system, training of sales staff and targeted marketing measures. In contrast, development on the international markets outside of France is less than satisfactory in both the wholesale business and at our own boutiques. The dominating strategic issue for the coming years, then, will be the internationalization of the Aubade brand – driven by collection development, marketing and sales measures.”

Lustenberger and Sulzberger closed their letter in the annual report with a discussion of the currency exchange rate issues with which the company must deal in 2015. “The CalIda Group will respond quickly to these negative external influences and adjust cost structures wherever possible. The Group’s brands are firmly embedded with trade and private consumers, which, coupled with a solid operating structure, will help support the Group’s earning power. We still expect income for the fiscal year 2015 to fall considerably, however.”