Cortefiel doubles EBITDA in first half as revenue increases 6%

Spain’s Grupo Cortefiel said EBITDA rose 85.4 million in the first six months of 2017, up 134.9% on the previous year.

In the six-month period, revenue climbed to 563.6 million euros, up 5.9% on the first half of 2016, as a result of continued growth in sales across all brands, markets and channels, particularly online, announced the clothing company on Monday.

The brand attributed the EBITDA increase to the combined effect of higher sales, a 4.1% increase in gross margin and a 3% reduction in operating costs compared to the same period last year.

The update comes just months after CVC and PAI acquired a stake in the retail business from Permira in a transaction that valued the company at 1 billion euros.

Grupo Cortefiel CEO Jaume Miquel said the good like-for-like performance, the improvement of the margin on all brands and the cost reduction efforts are part of a strategic plan launched in September 2016.

In terms of distribution, e-commerce sales increased by 28% on the previous year. All brands recorded online growth of over 20% in the six months between March and August.

The company’s loyalty programme, a crucial part of its business strategy, increased its number of members by almost 10% to 21.2 million members across all brands. Loyalty card sales increased by 7.4% during the period.

In light of this, Miquel said the company will increase its emphasis on boosting its digital business and the loyalty programme, not just in terms of sales growth but also to strengthen the relationship between card members and the brands.

During the first half of the year, Cortefiel opened new stores in France, Spain, Belgium, Russia and Mauritius, among others, and launched the business in India.

By the end of August, Grupo Cortefiel had 1,932 stores in 80 countries, including 1,166 directly-owned outlets, 661 franchises and 105 concessions.

Last September, Grupo Cortefiel successfully completed a bond issue of 600 million euros.