- Substantially increased future investments in new and existing stores
- Continued investment in Online
- Significantly grew sales of BIO-Cotton in 2011 and will double the BIO-Cotton exposure in 2012
- Continued ‘Power-Price-Lines’ and added ‘Style/quality’-collections
- Sustained onward development of the C&A Brand
Dusseldorf, 25 April 2012. C&A Europe concluded the financial year 2011/12 successfully in a challenging market environment. The fashion-value retailer with 1537 stores in 20 European countries drove sales performance once again above industry average across Europe and in most of its markets. From 1 March 2011 to 29 February 2012 (financial year 2011/12), total gross sales of C&A Europe grew by € 212 million to € 6,8bn, a gain of 3.2 %. “Our persistently solid and above European market growth during our anniversary year 2011, demonstrates once again our continued ambition for sustainable business development,” declared Andreas G. Seitz, member and spokesperson of C&A’s European Executive Board, presenting the annual results for the financial year 2011/2012. “We are constantly developing the C&A brand. Furthermore, we continue to invest significantly in our store network in new and existing retail markets. We aim to work innovatively across channels – be it offline or digital - and we are focussing our efforts on improving the customer offering with accents on style, quality and excellent value-for-money", Seitz said.
In the financial year 2011, C&A Europe has achieved a clearly higher growth rate (+3.2 % vs. previous year) than the aggregated European apparel market average (-0.2 % vs. previous year). As a consequence, C&A expanded its aggregated European market share from 5.4 % to 5.6 %. “Particularly in view of a sluggish and still volatile market environment with challenging seasonal conditions, the achievements made in 2011 affirm our business approach of flexibly responding to changing market scenarios without losing sight of our long-term growth targets," Mr. Seitz stated.
Consolidated European Sales trend exceeds industry-average benchmarks
In Germany, C&A’s largest retail market in Europe, total gross sales in the financial year 2011/2012 came in with € 3,09bn, corresponding to a growth of 2.6 % vs. the prior year and higher than the German apparel market average of 1.6 %.
The year 2011 was particularly satisfactory for C&A in Austria, where the apparel sector experienced a pronounced drop of -4.8 % in overall sales and C&A achieved overall gross sales of € 397 million with an annual growth rate of 3.7 %.
In France, C&A generated total gross sales of € 608 million, a gain of 3.6 % vs. the previous year, as such clearly surpassing the negative apparel market trend of -0.7%.
In the Netherlands, C&A closed the year 2011 with overall gross sales of € 510 million (-0.8 % vs. prior year), thereby performing markedly better than the apparel sector which experienced a pronounced drop of -3.5 %.
In Belgium and Luxembourg, C&A reported total gross sales of € 527.5 million in financial 2011/12, a growth rate of +1.6 % over the year prior, whereas the apparel market trend came in slightly negative (-0.2 %).
C&A Switzerland achieved overall gross sales of CHF 579 million for financial 2011/12 and thus could uphold market share to previous year level. The Swiss apparel retail market panel reported a total sales decrease of -3.4 %, acknowledging the fact that consumer confidence in Switzerland has been severely under pressure and has reached a 24 month low point in the 4 th quarter of 2011.
For the Iberian Peninsula (Spain and Portugal), C&A reported total gross sales of € 571 million, a decline of 1.7 % over prior year, this against a background of a stable apparel market as reported by GfK market panels.
In Eastern Europe (Slovenia, Slovakia, Czech Republic, Hungary, Poland and Russia), C&A was able to significantly increase overall gross sales by 9.4 % to € 454 million.
In C&A’s relatively new markets (Croatia, Romania, Italy, Turkey), total gross sales grew by 42.5 % to € 162.5 million, demonstrating the increased expansion in several of these markets. As such, twelve new stores were opened in the year 2011/12 in Romania and four in Turkey.
C&A’s consolidated European market share of the markets the company is trading in grew from 5.4 % to 5.6 % in the calendar year of 2011.
C&A posted the strongest market share gains in Hungary and Austria. In Hungary, C&A’s market share had a pronounced growth from 9.3 % to 10.2 % and in Austria from 7.9 % to 8.6 %.
In Germany, C&A’s market share grew solidly from 9.2 % to 9.5 % in the year 2011, this against a positive market development of 1.6 %.
Also in BeNeLux, C&A was able to increase its market share. In the Netherlands market share grew from 5.2 % to 5.5 % and in Belgium from 8.3 % to 8.6 %.
C&A’s market share in France evolved slightly positive from 1.9 % to 2.0 %, this against a negative apparel market trend of -0.7 % over the year prior.
With the exception of Portugal, C&A maintained or increased its market shares in all of its markets, as reported by GfK.
“Economic uncertainty, challenging seasonal weather conditions and weak consumer confidence levels in most markets had an adverse effect on customer demand in the year 2011, resulting in increased competition for consumer spending that in turn led to multiple price activities and sales promotions. The fact that C&A strengthened its position further by increasing overall sales and market share on European level proves that customers appreciate our competent offering, with a varied range of interesting fashion for the whole family at excellent value prices”, Mr. Seitz pointed out.
Continued Value- and Style development
The cornerstone of C&A’s business concept is to offer interesting fashion, style and reliable quality with an outstanding Price/ Value relation for the whole family.
“In 2011, C&A robustly upheld its position in a demanding and sluggish market. Offering ‘best value’ for our customers in a trusted way has always been and will remain a key ingredient in our business concept. The introduction of permanent ‘Must have’ power-price-lines during the last year was successful and will be continued”, Seitz said. This was all the more important as it proved difficult to assert the expected retail price increases in last year’s challenging market environment. “Despite increased sourcing costs due to historically high cotton price levels in 2011 and rising labor costs in key sourcing markets, we chose a strategy of further strengthening our price/value leadership position in the market”, Seitz added.
In the year 2012, C&A aims to increase the dimension of ‘style’ in its Ladies assortment. The announced collaboration with Cindy Crawford, one of the renowned style icons in the modeling world, will include a “Cindy Crawford @C&A” collection as well as dedicated endorsement lines, starting in fall 2012. “Once again we are focusing on emphasizing fashion-, style- and quality competence coupled with excellent value-for-money for our female customers. Cindy is a great and credible ‘ambassador of style’ and all of us at C&A are excitedly looking forward to working with Cindy, who we feel is a great fit with us and our customers", Seitz explained.
Investments in stores and new markets
As per April 2012, C&A is operating across a store network of 1537 stores Europe-wide.
The opening of ca. 100 new stores is planned for the 2012/2013 financial year, which will represent a net growth of about 70 stores in 2012, after closing effects.
C&A’s new store concept which was piloted during the year 2011 in a ‘test-and-learn’ environment in several stores across different countries – one of which was the landmark store in Cologne, Germany has earned visible acceptance from customers throughout Europe.
“Following the initial pilot store launch and the gained learning, we are now rolling out the new store concept so that we will have about 450 stores along the lines of the new store concept by the end of the trading year 2012”, Mr. Seitz stated.
An increased total investment of more than € 700 million with a pronounced accent on store network expansion and renewal is aimed to be allocated over the next three years to support the company’s sustained growth ambitions.
Germany remains C&A’s largest market in Europe with 494 stores currently. The opening of about 20-25 new stores is planned for the year 2012.
C&A’s mid-range retail markets represent a store network of 130 - 150 stores which include Austria (136 stores), Belgium (129 stores), the Netherlands (132 stores) and France (130 stores).
A robust extension of the store network was achieved in Poland (plus 14 stores over prior year), where C&A trades today through a total of 64 stores and Online.
“We remain very committed to achieving sustainable growth through substantial investment in existing store space and in the organic expansion of our total store network. With our increased store investments over the years to come, we want to enhance the attractiveness of our stores and the shopping experience for our customers”, Seitz mentioned.
Going forward, C&A is expanding in the year 2012 into Serbia, the company’s 20th market in Europe. Two stores have been opened in and around Belgrade since the start of C&A’s new financial year 2012. The first store is located in the USCE Shopping-Centre in the nation's capital, and offers the entire C&A product range in a total sales area of over 2500 square meters.
C&A is also continuing its expansion in Russia. The franchise contract with C&A’s Russian partner RTG was recently extended and 3 additional stores are to be added in 2012, with more stores to come in subsequent years.
Online business increasingly important
The expansion and future growth of C&A’s E-commerce business will be a major strategic focus area across Europe. Following the successful cooperation with the online retailer Wehkamp in the Netherlands starting in 2007 and the well received launch of C&A Online in Germany during the year 2008, C&A Austria and C&A France can now look back at their first complete financial year with their own online presence. “C&A’s total Online business grew more than 40 % in financial 2011/12 and by the end of May 2012 we will have established C&A Online in 8 European retail markets; As such we will be able to further leverage the brand strength of C&A across channels,” Seitz said in explaining the above industry growth of Online sales. C&A Online will be active by end May 2012 in Germany, France, Austria, Poland, Spain, Belgium, Italy and in the Netherlands where the cooperation with Wehkamp will be continued concurrently. “In Belgium and selected parts of Germany, we are also exploring ‘click and collect’ in order to bridge Online and Offline business activities for our customers”, Seitz added.
Going forward, C&A is also increasing its corporate activities in social networking. “Global social media networks are an increasingly important way for us to listen to and engage and communicate with our customers“, explained Seitz.
Sustainable business practices
C&A will continue to build on the long-term advantages of sustainable business practices. The new Corporate Responsibility Report, which was presented by the spokesperson of C&A’s European Executive Board together with the key financial figures for the year 2011/12, is a clear proof of this. In “We Care. Acting Sustainably. C&A 2012.”, the company reports on its social and ecological commitments and associated targets. “Particularly at the early stages of the supply chain, the emphasis is on the responsible use of natural resources such as soil, water and air," Seitz explained.
In this context, he noted in particular the accelerated expansion of C&A’s BIO-Cotton collection. “This is by far C&A’s largest and most visible sustainability programme, which stems from the genuine interest in applying the rules of ethical management and environmental protection.” In financial 2011/12, C&A Europe significantly increased the efforts and sale of BIO-Cotton articles to above 32 million items (26 million the year prior), a gain of over 20 %. For the year 2012, C&A aims to double this figure to over 60 million items. “Our long-term sustainability efforts are deeply rooted in the dedication to social and environmental responsibility that aims to place C&A at the forefront of the global apparel industry. As such, sustainable business means more than just helping the environment," Seitz noted. “Our social commitment, for example in Indian school projects, is a clear signal towards the principle of sustainability.” In this context, Seitz also referred to C&A’s commitment to ‘Zero Discharge 2020’ by which C&A Europe accepted the challenge together with six other international companies to release a ‘joint roadmap’ towards ‘Zero Discharge of Hazardous Chemicals’ [ZDHC] in the supply chain by 2020.
“Several indicators suggest that macro-economic and consumer confidence conditions will remain tough in many markets during 2012,” Mr. Seitz said as spokesperson of C&A’s European Executive Board, assuming a sluggish market environment in which consumer’s willingness to spend will potentially remain uncertain and difficult to gauge for the coming year. “Right now, we are obviously living in a Europe with different economic speeds," Seitz observed. Consequently, the management is focussing on taking advantage of existing market opportunities while at the same time applying a sound level of risk management.
“In retrospect, we know that 2011 was a very challenging year for apparel retail,” Seitz mentioned. “Hence, our performance of growing the business and gaining market share is to be assessed all the more positively as it demonstrated our ability to adapt to constantly evolving and demanding market conditions. C&A has an excellent financial solidity as well as the strength to respond to ever-changing and challenging economic circumstances, in which we are able to limit risk on the one hand and to maximize opportunities on the other hand,” Seitz concluded.
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