Etam group sales down 5.3% in first half of the year

It is fair to say that the Chinese business is having a heavy impact on Etam. The French apparel and lingerie group's China subsidiary is going through a far-reaching reorganisation this year, which will hopefully lead to improved results, but is currently tarnishing the group's positive performance in Europe. As of 30th June 2017, Etam, owner of the Etam and 1.2.3 brands, reported a 3.2% decline in global revenue for the second quarter, and a 5.3% one for the first half of the year.

This negative 2017 trend must be analysed in its geographical detail. Europe was actually a growth region for Etam in the second quarter, and accounts for three quarters of the group's overall business. In the last three months, European sales rose in fact by 4.7%, and by 0.3% in like-for-like terms and at constant exchange rates. In the first half of the year, real growth was 3.4%, though it was equivalent to a 1.2% fall in comparable sales and at constant exchange rates.

Though the smaller 1.2.3 brand has been, according to the group's press release, "disappointing," the consolidated performance of the Etam brand in ready-to-wear apparel and lingerie has more than compensated for this.

But the real negative in the first six months of the year still remains the group's Chinese business. The decrease in revenue continued in the second quarter (-28.7%, -20.2 % in comp sales), leading to a 25.6% shortfall in the first six months (-21.1% in comp sales). This has had a "significant" impact on the group, leading to the deployment of an "extraordinary" action plan to try and steady the ship.

The new management team which took over in China last spring has begun "a strategic business review" in order to plot a new course for the future. Some decisions are already being implemented: more and more stores are being closed down, resulting in 154 fewer shops out of 2,442 in the first six months; logistics are being overhauled, refocusing on one single warehouse; and the sale of residual stock has been stepped up. The reorganisation concerns the group's ready-to-wear business; in China, Etam's newest lingerie retail concept has actually spawned new openings.

Etam is also busy on another front, that of the takeover bid made by Finora, the company belonging to the Milchior family which, in association with the Tarica and Lindemann families, is seeking the group's delisting. The share purchase operation will begin on 21st July, the price having been fixed at €49.30 per share, with a ten-day negotiation period.

Etam group sales down 5.3% in first half of the year

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