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Stockholm, February 18, 2011
Stable development, good profitability and financial strength
January 1 - December 31, 2010
October 1 - December 31, 2010
Events during the report period
Comment from the CEO
Operating profit amounted to SEK 51 million despite major investments and listing change during the year
The fourth quarter met our expectations, which meant a sales increase of 5 percent compared with 2009 and a gross margin in line with the previous year.
We closed the full-year with a sales increase of 8 percent to about SEK 356 million. During the year we completed several major investments for the future that will be charged against earnings in the short term, despite which we reported an operating margin of just over 14 percent for the full-year.
The move to the big list (NASDAQ OMX Stockholm) in June means that more people can invest in the Odd Molly share. At the same time the process further improves our internal routines and procedures - and means a seal of approval. In 2010 we opened two of our own concept stores in Los Angeles and Copenhagen as well as two outlets outside Stockholm and Göteborg. We launched the new Post Fire Dew men's collection, the first shipments of which were sent to retailers in fall 2010.
We are proud of having delivered a strong result - and of the stability and strength of the company. Odd Molly’s financial position remains very strong, with cash reserves of SEK 89 million and an equity/assets ratio of 81 percent.
Odd Molly’s collections
Operationally, 2010 was a good year, but a tough one, marking the first time in Odd Molly’s history that its order value had decreased. A number of factors explain why the order value for spring/summer 2011, which was presented in the fourth quarter, did not reach expectations. The order value amounted to about SEK 165 million, compared with about SEK 180 million for the previous year’s collections.
We have identified the reasons for the trend reversal and have taken a number of measures, mainly redistributions in the composition and pricing of the collections, to get back to a mix with a higher share of volume products. We have divided up our product range into three different parts, where we introduce Classic - a limited line with a number of best-selling pieces from previous collections - and what we call Gold - pieces with a more distinctive design and lots of hand-sewn details. The most important, however, is the bigger Odd Molly collection of commercial pieces, which we are constantly trying to refine without sacrificing that distinctive Odd Molly touch.
In addition to the collections, we are also working on improving our partnerships with agents and retailers around the world.
Odd Molly and the world
During the year we saw the prices of cotton, silk and other raw materials increase at the same time that our suppliers’ labor costs have risen, which has raised our purchasing prices. Our aim is to be able to handle this without it affecting our gross margins, partly through certain price increases and partly through the changes in the collection’s composition. Odd Molly’s clothing should still fall in the medium price range with prices "within reach."
Odd Molly continuously monitors how the brand is represented around the world and signed an agreement during the year with a new distributor in Russia. The big sales meeting where we presented the fall/winter 2011 collections was recently concluded and orders are arriving. Post Fire Dew recently had its second runway show at Berns, and Odd Molly was shown again at New York Fashion Week. It is still too early to say anything about sales of the collections.
In 2011 we will continue in our efforts to combine creativity and saleability, while further strengthening our brand through innovative sales work and marketing. At the same time we are working through a structured process to ensure consistently high quality and efficiency in operations. Our desire is to continuously improve in every respect, guided by our core values: Love, Courage and Integrity.
Christina Tillman, President and CEO
Please find the full report in the attached pdf-file.Download pdf