The corona crisis has left clothing chain WE Fashion with a heavy hangover. The retailer has suffered a severe loss last year.
Lockdowns weigh heavily
In the broken financial year 2020/2021, which ended on 31 January of this year, revenue fell by 28.7% to 206 million euros. A year earlier, revenue was still 265 million euros. And where there was still a profit of around 6 million euros in the previous financial year, the Dutch fashion chain now had to swallow a loss of 17 million euros – a result that was embellished with a one-off bonus of 33 million euros from the sale of real estate. Without this ‘windfall’, the loss would have risen to around 50 million euros.
WE Fashion says that the forced store closures have severely affected the company. Moreover, there would hardly have been any improvement in the first months of the current financial year, since the retailer gets most of its turnover from the Netherlands, and stores were still closed there. Online sales have indeed increased, but no further details are available.
In recent years WE Fashion has already sold real estate several times. As a result, the equity has decreased to 32 million euros and the solvency is less than 15%, writes Quote. The fashion chain is said to be in talks with its lenders, because the company may not be able to meet its financial obligations this year.
