Textile group Calida expects to make a loss in 2023 and is reviewing its strategy

Swiss textile group Calida, owner of lingerie brand Aubade, expects to make a loss in 2023 following setbacks in its acquisitions, and on Tuesday announced a review of its strategy to focus on its profitable brands.

This pyjama manufacturer will be registering a value adjustment and expenses of between 39 and 49 million Swiss francs (40.1 to 51 million euros) for its Cosabella lingerie brand, acquired in 2022.

Added to this will be around CHF 3 million in costs to liquidate the online sales portal onmyskin.com and a CHF 19 million value adjustment on the underwear brand Erlich Textil, also acquired in 2022, which will fall into the red in 2023, the group said in a statement.

“As the growth strategy defined in 2021 has not resulted in the expected business development, Calida Group will focus on optimising the business with the existing profitable Group brands over the next three years,” said Felix Sulzer, its interim chairman and CEO, quoted in the statement.

After selling off its sportswear and mountainwear brands in quick succession, the group said it wanted to concentrate on lingerie and underwear, and made two acquisitions. It bought the American Italian-inspired lingerie brand Cosabella to expand in the United States, and the German start-up Erlich Textil to reach out to a younger clientele keen on sustainable textiles.

However, the Cosabella business “is still lagging well behind” initial projections, the group acknowledged in the press release, despite “solid online activity,” it added.

In June, at the time of a profit warning, the group announced that Erlich Textil’s sales had deteriorated to such an extent that it no longer wished to retain this brand.

Following a strategic review, the group intends to “focus on sustainably improving the profitability” of its three flagship brands, Calida pyjamas, Aubade lingerie and Lafuma Mobilier garden furniture, while concentrating “on exploiting the growth potential of Cosebella,” it said in a press release.

This strategic reorientation “will have its first positive effects on results from 2024,” it assures.

Zurich, 12 Sept 2023 (AFP)