Represented by Oxbow, the surf segment of the Lafuma Group was the only one that registered a rather significant sales drop, falling by 5.5 percent to €30.1 million in the six months ended on March 31, while the group as a whole stopped the negative trend of the past two years and rose by 0.9 percent to €122.4 million.
Along with the hunting segment, whose sales declined by 2.8 percent, it was also the only one to see deterioration of its profitability, whereas the group as a whole improved its operating profits to €2.4 million from €1.0 million in the year-ago period. The management said that Oxbow's lower profits were due to increased marketing expenses and indicated that both sales and profits are going to improve in the second half.
One factor will be a decision to stop selling Oxbow in the U.S. and to concentrate resources for the brand on France, where its retail sales have been rising again since April, and in the neighboring markets, where the sales networks have been restructured. Elsewhere, Oxbow, which still gets about 80 percent of its sales from the French market, has signed up new distributors in Finland, Turkey and Japan.
Two more Oxbow stores were opened in France in the latest six-month period, building up to a network of 14 corporate stores and 10 franchises.
After several years of negative results, the Lafuma Group finally reported a net profit of €0.7 million for the six months ended March 31, which compares with a loss of €0.8 million in the same period a year ago. The gross margin improved to 54.2 percent from 52.6 percent and the operating profit (Ebit) nearly doubled to €1.7 million, largely due to the end of a long period of inventory reduction.
The biggest progress was recorded within the mountain division, comprising Millet and Eider, whose operating profit rose to €3.2 million from €1.5 million in the year-ago period. The greater outdoor division, represented mainly by the more accessible Lafuma brand, reduced its losses to €0.2 million from €1.7 million. While the great outdoor division lifted sales by 1.2 percent to €42.5 million, the mountain division experienced an acceleration of its growth, rising by 6.9 percent to €40.2 million.
The group's retail sales fell by 4.9 percent to €22.6 million, but were stable excluding the stores transferred to its Chinese joint venture with LG Fashion, which started up last September.
Among the product categories, apparel sales declined by 2.7 percent across the group to €80.0 million, and equipment was down by 10.8 percent to €9.7 million, but footwear went up by 8.5 percent to €14.9 million, including a 13 percent increase for Lafuma branded shoes. Furniture recorded a 23.2 percent gain to €17.8 million.
Geographically, the group scored increases of 0.2 percent in France and 5.7 percent in the rest of Europe, with good performance especially in Northern Europe and in Italy. Sales in the U.S. declined by 13 percent as the company decided that it would no longer carry any stock in the country, improving its profitability. Sales in Asia went down by 3.6 percent, but they increased by 6.7 percent excluding the Chinese market.
Significantly higher orders have been recorded by the group for all its brands, and the management expects to book a profit for the full financial year (more in The Outdoor Industry Compass).