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Odd Molly International AB (publ)
Stockholm, Sweden, October 21, 2011
Sales meet expectations and operations streamlined
January 1 - September 30, 2011
July 1 - September 30, 2011
Events during the quarter
Sales during the third quarter amounted to SEK 110 million, in line with the reported order value. This fall’s main collection went out in stores during the quarter, while the large part of the pre-fall collection was delivered in the previous quarter. The gross profit margin remained at a stable, high level of 58.3 percent. Quarterly operating profit was charged with one-off costs of approximately SEK 4.2 million attributable to the discontinuation of the men's collection, Post fire dew, and the closure of the store in Los Angeles. Adjusted for these costs, we delivered an operating margin of 20.0 percent for the quarter.
The order value for Odd Molly’s spring and summer 2012 collections was reported in early October at approximately SEK 114 million, a decrease of 31 percent compared with the same collections in 2011. The outcome was lower than expected and undoubtedly a sign that weak consumer spending and economic uncertainty in several of our most important markets have affected Odd Molly’s buyers.
In connection with the report on the weaker order value, the Board of Directors made a number of decisions to strengthen the prospects of future profitability and growth. Among other things, the operations in the U.S. are being reevaluated and the store in Los Angeles was closed as of October. The store space is being sublet, which will cover part of our rent through the remainder of the lease. Moreover, the separate men's collection, Post fire dew, is being discontinued after it failed to meet our goals. As a whole, these decisions are expected to reduce costs by about SEK 10 million on an annual basis as of 2012, after all the closure costs are booked during the third quarter 2011.
The purpose of these measures is to enable the organization to fully focus on developing the core business - the women's collection - and the company's main markets, i.e., where we have the greatest potential for strong future development.
As Odd Molly closes its accounts for the period, I am also marking a conclusion of my own. This is my last interim report as CEO after seven years with the company. I am proud of the journey Odd Molly has taken, which has included major investments and a number of bold decisions. I am convinced that the changes now being implemented will lead the company and the brand to further success.
Christina Tillman, Chief Executive Officer
Please find the full report in the attached pdf file.Download pdf