Pandemic Impact and Recovery for Wolford: A Closer Look at the Upscale Austrian Hosiery and Bodywear Specialist
Wolford, the renowned Austrian hosiery and bodywear company, recently unveiled its financial results for the shortened fiscal year that was heavily impacted by the ongoing pandemic. Like many businesses, Wolford experienced significant losses as a result of the global health crisis. From May to December 2020, the company witnessed a rollercoaster of ups and downs. The reopening of stores in Europe, the US, and China after the initial wave of Covid-19 brought some relief, but the subsequent wave of lockdowns in Europe from October 2020 onwards led to further setbacks. It is expected that these losses will extend into the second half of 2021.
Despite these challenges, Wolford managed to generate sales of €68 million during this period, an impressive feat considering the circumstances. Although this represents a 25% decline compared to the same eight-month period in 2019, it is still a relatively resilient performance. More notably, Wolford achieved a group profit of €12.8 million, signifying a remarkable improvement from the €14.5 million loss incurred in the previous year. However, it is important to note that this profit was partly bolstered by the sale of real estate and the change in the value of right-of-use assets resulting from impairment tests. The sale of the Bregenz property brought in a substantial sum of €72 million, which was utilized to completely pay off all outstanding debt. Moreover, the company implemented several restructuring measures, resulting in a reduction of personnel costs by over 20%.
One area that demonstrated significant success for Wolford during this challenging period was its shift towards online sales. With its own online business and its wholesale partners’ e-stores, the revenue share from e-sales now accounts for approximately 21% of the company’s total sales. This increase in online sales was accompanied by a remarkable 45% growth. Additionally, Wolford responded swiftly to the demands of the pandemic by introducing Wolford Care Masks, which proved to be a highly popular addition to the brand’s product range, generating sales exceeding €10 million.
The incorporation of Wolford’s The W and W Lab collections into the brand architecture has proven to be a success, solidifying their role as an integral part of the new face of the Wolford brand. Furthermore, collaborations, such as the one with Adidas, exceeded expectations. Wolford has also undertaken the relaunch of the Essential Collection and has plans for targeted campaigns in the coming months, displaying its commitment to continuous improvement and innovation. Expansion into new markets is also on the horizon, with Wolford strategically increasing its presence in Poland, Scandinavia, the United Arab Emirates, Central America, and Japan. By partnering with established agencies and distributors in these regions, the company aims to leverage their expertise and local presence. This has, in turn, opened doors to multiple multi-brand outlets in 2020.
Looking forward, Wolford has set the ambitious goal of reaching break-even in fiscal 2021. Encouragingly, its earnings this year have already surpassed the previous year by 22.4%, demonstrating a positive trajectory. Additionally, the company has experienced a 1.7 percentage point increase in its gross profit margin, indicating a growing profitability. Initiatives such as remote selling and streaming have contributed to this success, exemplified by March sales being nearly €2 million (38%) higher than the previous year.
Despite the unforeseen challenges posed by the pandemic, Wolford remains steadfast in its dedication to recovery and identifying growth opportunities across various markets. With a resilient financial performance, key strategic partnerships, innovative product offerings, and expansion plans in promising regions, Wolford is poised to navigate the uncertain landscape and emerge stronger than ever.
Useful Links:
1. Wolford Official Website
2. Wolford Press Room
