Wolford AG — Earnings Release 2006

May 11, 2006

News Details

Ad-hoc | 11 May 2006 08:31

Wolford AG: Sales for the 2005/06 fiscal year

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Wolford delivers sales growth and turnaround · Sales grow 4.4% to EUR 121.4 million · Strategic refocusing bringing sustained benefits · Lasting superior sales expansion in own boutiques Bregenz, Austria, May 11, 2006 For the first time since the 2000/2001 fiscal year, publicly traded Wolford AG had a thoroughly successful fiscal year, with renewed sales growth for the full year. From May 1, 2005 to April 30, 2006, sales were lifted by EUR 5.1 million (4.4 percent) from the prior year’s EUR 116.3 million to EUR 121.4 million; sales were also nearly 2 percent higher than two years earlier. Wolford CEO Holger Dahmen, commenting on the welcome result, says, “There is no reason for exaggerated euphoria, but with four quarters of sales growth in succession, it’s fair to call this a turnaround. In the final quarter alone, sales climbed another 10.6 percent year-over-year.” The considerable rising trend in sales extends to almost all segments of the Austrian luxury brand, whether analyzed by national markets, distribution channels or product groups. For Dahmen this represents “the clear validation of our strategy pursued since about two years ago of concentrating on measures to build lasting brand strength.” The strategy comprises activities like the cautious broadening of the product portfolio coupled with further development of the brand’s fashion expertise, a new advertising campaign, an assertive pricing strategy and the new store concept. The latter innovation is proving especially popular with customers, with sales at most of the redesigned stores growing at rates in the double digits. In the last fiscal year, 23 locations have already been opened or redesigned in the new look. This includes new openings of boutiques in the fourth quarter in Bergamo, Kassel, Milan and Beverly Hills. “On balance”, the CEO believes, Wolford is “headed in the right direction”. A positive trend was witnessed especially in business with the partner-operated boutiques and at Wolford’s own boutiques. In total, sales through the boutique channel grew 15.6 percent over the past twelve months. In the Retail segment as a whole, which represents all direct sales (Wolford-owned boutiques, shop-in-shops and factory outlets), the company achieved a revenue expansion of 24.5 percent that was attributable to every channel in the segment. Revenues from department stores improved toward the end of the fiscal year and, for the full year, slightly exceeded the year-earlier figure, while sales to specialist retailers marked a small decline. The private-label business meanwhile expanded 11 percent over the fiscal year. Wolford delivered double-digit growth compared to the prior year in Spain (up 31 percent), the Eastern European countries (21 percent) and Scandinavia (11 percent). Thanks to a strong final quarter, Italy (14 percent) and the Netherlands (10 percent) also saw growth in the two-figure range. Switzerland rallied with growth of 8 percent after several years of decreases, and an increase of 5 percent was attained in the home market of Austria. In Germany, Wolford’s largest market, sales were pushed up 4 percent in 2005/06; six consecutive quarters of revenue growth bear out the positive trend in this country. Sales in the United States, the second most important market, were up 2 percent for the year. A small easing was seen in France and the United Kingdom, although the U.K. rallied substantially with a fourth-quarter increase of 16 percent. In both these markets as well, despite the overall dip, sales in the boutique channel grew. In terms of product groups, sales in the core Legwear business rose (by 2 percent), while the most rapid growth was in Bodywear, at 9 percent. In Dahmen’s words, this documents that “retailers and shoppers are enthusiastic about our strategic expansion of the offering by flat knit products and trendy women’s outerwear.” As already reported, the new designer collaborations with French luxury label Kenzo and U.S. designer Zac Posen have struck a responsive chord with the fashion community and merchants. Both partnerships will debut with the fall/winter 2006/07 season, and Wolford will thus be carrying the products of four designer collaborations next season: Giorgio Armani under license, and Missoni, Kenzo and Zac Posen as designer collections. Outlook With the sales forecast met and exceeded, earnings for the 2005/06 fiscal year remain likely to have increased at a higher rate than sales. For the 2006/07 fiscal year just begun, the management foresees a sustained positive sales trend in light of the recent pace of advance orders for the fall/winter 2006/07 collection. In other news, the executive board of Wolford AG announces that, as part of the repositioning of the brand, the designer Antonio Berardi has been appointed Wolford’s Creative Director. Berardi will oversee the design and development of all areas of the collection, consisting of hosiery, bodywear and the integration of swimwear and lingerie into the overall concept. Berardi’s first collection will be for spring/summer 2007. “I am really happy with this decision,” comments CEO Dahmen. “It’s the logical next step in the process of repositioning Wolford as a luxury brand and comprehensive fashion label. Our aim is to harmonize all product groups with the help of an experienced creative director to ensure the “common thread” linking the entire collection into a cohesive whole. In Antonio Berardi we have found exactly the right person for the job.” “It is a wonderful opportunity to take this luxury brand with its strong heritage to the next level,” declares Antonio Berardi. “I feel that the Wolford aesthetic perfectly reflects my love of strong, yet sensual women.” The collection will be presented in July 2006 in Vienna and will be available in stores from November 2006 with the Cruise collection via all Wolford distribution channels worldwide. The sales results reported here are preliminary. The final sales data and the earnings for the 2005/06 fiscal year will be published on July 25, 2006. Contacts: Holger Dahmen, Chief Executive Officer Peter Simma, Board Member investor@wolford.com, www.wolford.com Wolford AG, Wolfordstraße 1, A-6901 Bregenz, Austria; Tel. +43 (0) 5574/690 0 (c)DGAP 11.05.2006 ————————————————————————— Language: English Issuer: Wolford AG Wolfordstraße 1 6901 Bregenz Österreich Phone: +43/5574/6907434 Fax: +43/5574/6907440 email: investor@wolford.com WWW: www.wolford.com ISIN: AT0000834007 WKN: 83400 indices: ATX Listed: Amtlicher Markt in Wiener Börse; Freiverkehr in Berlin-Bremen, Stuttgart, München; Open Market in Frankfurt End of News DGAP News-Service —————————————————————————