In the third quarter of this year, Baltika Group increased the export and e-sales of Estonian design
In the third quarter of the year, Baltika Group, the most significant fashion brand house in the Baltics, increased their wholesale and franchise sales to export markets to 2.2 million euros or by 4% compared to the same period of the previous year. The sales of Baltika’s e-shop, Andmorefashion.com, increased as well, reaching 321,000 euros (the growth amounting to 29%). In the span of nine months, the e-sales exceeded the threshold of one million euros. The total quarterly sales of Baltika Group remained at the same level compared to the previous year. The third quarter, however, ended with a net loss of 471,000 euros. The increased loss compared to the previous year is mainly due to retail sales not meeting expectations in August this year.
In the third quarter, the Group’s sales revenue of 12 million euros remained at the same level compared to the same period of last year. Retail sales were 9.4 million euros in the third quarter, decreasing by 1% compared to the same period of last year. ‘Retail sales in the third quarter were mostly influenced by the results of August. The retail sales of the Baltic region were affected by a sharp decline in the visits to shopping centres in July and August, probably due to the summer weather. Although the weak performance in August affected all markets, the Estonian market was able to show a 3% increase in sales in the third quarter due to a higher level of supplies,’ said Meelis Milder.
Despite the impact of similar factors, the e-shop of Baltika Group and exports, i.e. wholesale and franchise sales, continued to grow. Over the span of nine months, the company’s sales revenue increased by 1% or 201 thousand euros compared to the same period of the previous year. Meelis Milder, Chairman of the Management Board of Baltika Group, added that the company wants to keep their position among the five largest fashion trade enterprises in the Baltics and to achieve stable results in the home markets of Baltika – Estonia, Latvia and Lithuania – but Baltika sees the increase in sales revenue through export and e-sales as a growth engine. ‘We have taken important steps of directing our sales point to certain export markets as well as investing more in the development of our e-shop Andmorefashion.com. We have also invested in the creation of a model needed to enter new markets, which combines the strengths of the physical shop environment (pop-up shops) and Baltika Group’s e-commerce platform Andmorefashion.com to provide an excellent customer experience and combine the opportunities of traditional retail and e-business,’ Milder added.
Wholesale and franchise sales increased by 4% in the third quarter, amounting to 2.2 million euros. In the spring of 2017, Lady & Gentleman CITY, the Russian department store chain, joined Baltika’s wholesale partners. From now on, their five larger department stores sell the Mosaic womenswear collection. Additionally, the growth of design exports is continuously supported by the added franchise market in Serbia and Peek & Cloppenburg, one of Europe’s leading department store chains – the Monton collection is sold in 38 shops of theirs. By the end of the third quarter, the number of franchise shops representing the brands of Baltika has grown to 32, which is 26 per cent of the entire portfolio of the shops. Over the span of nine months, wholesale and franchise sales increased by 7% (5,443 thousand euros).
The sales revenue of Baltika Group’s e-shop Andmorefashion.com was 321,000 euros, showing an increase of 29%. In terms of brands, Monton’s products were sold the most, the share of which accounted for 32% of the total sales of the e-shop. The developments of the e-shop continued in the third quarter: the network of Latvian shops offering the Click & Collect service expanded and many developments were performed to improve the e-client user experience. Over the span of nine months, the sales revenue of the e-shop at Andmorefashion.com increased by 38 percent and exceeded the threshold of one million euros.
Baltika Group ended the third quarter with a net loss of 471 thousand euros. The loss of the same period of the previous year was 296 thousand euros. The company’s gross profit margin was 44.0% in the third quarter, decreasing by 1.4 percentage points in a year. The Group’s marketing and administrative expenses remained at the level of the previous year by quarters and by nine months. The ratio of marketing and administrative costs to sales revenue was 46.6% in the third quarter, i.e. the ratio of expenses to sales revenue decreased by 0.1 percentage points. Over the span of nine months, the ratio of costs to sales revenue was 49.4% (nine months 2016: 49.5%).
Baltika Group is the leading fashion brand house in the Baltics with five internationally successful fashion brands – Monton, Mosaic, Baltman, Bastion, and Ivo Nikkolo. Baltika’s retail network includes 93 brand shops in Estonia, Latvia and Lithuania; the items of the collections can also be purchased via Baltika’s e-shop Andmorefashon.com, which delivers goods to 44 countries around the world. Thanks to wholesale and franchise partners, the brand collections of Baltika are on sale all over Europe, including in Peek & Cloppenburg, one of the oldest and most well-known department store chains, and in franchise shops in Ukraine, Russia, Belarus, Serbia, and Tenerife. In the Baltics, more than 1,000 employees work at Baltika Group. The shares of Baltika Group are listed on the Tallinn Stock Exchange, which belongs to the NASDAQ OMX Group.