Baltika Group 2015
Based on the aforementioned Baltika expects moderate sales growth in the Baltics in 2015. Due to additional new stores, opened at the end of 2014, the largest growth is expected in Estonia.
In Russia the plan is to close all non-profitable stores outside St. Petersburg, Kaliningrad and Kazan. Assuming that the rouble exchange rate will remain on the level of the last quarter of 2014, which is weaker than the previous three quarters, Baltika foresees a decrease in retail sales by over 1/3 in 2015.
Cooperation with new franchise partners from 2014 will continue in 2015. As for many franchise stores, 2015 will be the first full year, and Baltika plans higher wholesale and franchise sales growth than for its own retail channel. As the share of wholesale and franchise in total sales continues to grow, the Group’s gross profit margin will continue to decrease in 2015.
Baltika expects significant growth from the e-store andmorefashion.com, launched to cover all Baltika’s trademarks in August 2014. Thus, 2015 will be the first full year for the new site with all brands. Developing new localised markets by providing local language and payment opportunities is also foreseen for 2015. Additional plans include selling Baltika’s brands online through third party channels, too. Due to the aforementioned, Baltika plans significant e-store sales growth also for 2015.
The main goal for 2015 is to profoundly establish strategy: to maintain the position in the Baltic countries and to strengthen wholesale and franchise growth mainly through existing partners, optimising Russian market store portfolio and focusing on specific regions. No major investments are planned for 2015, regular amounts will be invested in own retail network, software etc. No additional financing from investors is planned for 2015.
Taking into account the long-term strategy, the targets for the Management of Baltika Group for 2015 are:
- to increase retail sales and profit on the Baltic market;
- to develop other channels (wholesale and franchise, e-commerce) and to increase their sales growth;
- to manage Russian market risks, and to optimise store portfolio in Russia;
- to increase operational efficiency, to improve distribution costs and sales ratio.
Financial target for the company’s Management is to sustainably increase sales and profit.