Le Coq Sportif turned in a small profit for the first half of this year, aided by investments in local production that enabled it to respond to demand more adequately, and it is projecting a double-digit jump in sales for the second half.
Airesis, the Swiss holding company that owns a majority stake in Le Coq Sportif, had already reported that the French brand's turnover increased by 1 percent to €56.8 million for the first half. Its average prices were up for the six months but some orders were shifted from the first to the second half, which partly explains the upbeat projection.
Le Coq Sportif's sales have been pushed up by the strategy to roll out about 500 branded retail corners, which are replenished on a weekly basis. About 90 percent of the materials used for its apparel are made in France.
The brand is starting to replicate part of its apparel strategy in footwear, with the launch of its first French-made sneakers. Other objectives are to come up with a performance range and to develop international sales.
Airesis added that Le Coq Sportif could benefit from increased recognition in the months ahead, due to its partnership with the French rugby federation. The French team has qualified for the Rugby World Cup taking place next year and it will start wearing Le Coq shirts made in France from November. Separately, the brand moved into Formula One and the boxing market this year by teaming up with Tony Yoka, amateur world champion and Olympic champion. It previously returned to cycling in 2012 and tennis two years later, and then signed two somewhat relevant European football teams in 2016, A.S. Saint-Etienne in France and A.F.C. Fiorentina in Italy.
Le Coq Sportif's gross margin improved by 4.3 percentage points to 48.4 percent and extra cost control helped to generate Ebitda of nearly €2.7 million for the first half, while it was slightly positive in the year-ago period. It ended the six months with profit of €545,000, compared with a loss of €1.4 million.
Movement, the Swiss freeride skiing brand controlled by Airesis, raised its sales from about 1.3 million Swiss francs (€1.1m-$1.3m) to nearly CHF 1.7 million (€1.5m-$1.7m) for the half-year. Movement's gross margin was up by 17 percentage points to 57 percent, although Airesis points out that the first half represents only a small part of the brand's activity. Its Ebitda amounted to a loss of CHF 1.6 million (€1.4m-$1.6m), a little less than CHF 1.7 million (€1.5m-$1.7m) for the year-ago period.
The Airesis group said that the rationalization of the product offering at Movement is helping to create more impact, and an improvement in production is starting to pay off. The group's distribution activities in Switzerland focus on Le Coq Sportif, with the launch of branded retail corners in the Swiss market. After Movement started to directly cover the French market, its next projects are to reinforce its positioning in the freeski market and to develop its industrial capacity to make its own skis.
The improved performance of both Le Coq Sportif and Movement enabled Airesis to raise its turnover from about CHF 63.4 million (€55.7m-$64.0m) to CHF 69.4 million (€61.0m-$70.1m) for the half year. It reported a net loss of CHF 1.6 million (€1.4m-$1.6m), but that was an improvement compared with a loss of CHF 4.6 million (€4.0m-$4.6m) for the same six months in 2017.
Airesis has increased its shareholding in Le Coq Sportif to 82 percent at the end of June, up from 79 percent at the same time in 2017, while its shareholding in Movement remains unchanged at 92 percent.
