Tuesday 15 September 2015

Gerry Weber report Q3 2015

Gerry Weber, Q3, 2015, report, front page

This report from Gerry Weber was not at all well accepted. After dropping the -10% with all the other stocks Gerry Weber dropped around an additional -10% on this one. Was it that bad?

To see the report in full please go here to take a look at the previous summary then please click on Gerry Weber report Q2 2015 and to find out more regarding Gerry Weber please visit analysis of Gerry Weber 2015.

The report was indeed horrible as can be seen below. They managed to push up the revenue which comes mainly due to that Hallhuber is now included and I would say that Gerry Weber have pushed out their cloths via discount sales which have given them almost no margin at all and therefore also no earnings for the third quarter. For the running nine months we have a profit of 0.48 € per share compared to 0.94 € per share in 2014.

Gerry Weber, Q3, 2015, financial statement

But the worst of it all is that I received a picture from my brother in Sweden that he took in a shopping centre outside of a Gerry Weber shop and just as I have observed here in Germany... there are too few people inside the stores and that will always be the biggest issue for any company to solve. Customers, customers, customers!

Conclusion: The more quarters arriving the worse the situation looks for Gerry Weber and the more I wonder how things will move forward. We really need to see the new CEO do something to change the non existing flow of customers inside the stores. I will remain a grumpy shareholder.


hmmmm said...

Hello once again,

Refer to my many previous statements suggesting that you need to do more work on understanding why the companies that you screen for are cheap.

Also, by taking the estimations from the market, everything tends to look FV.

I have met these guys a few times and have been short for equally as long, strategy is a joke and the company don't understand broad macro trends towards volume vs quality.

The company are trying to grow inorganically without fixing the core problems and I'm afraid this stock will simply continue to dive into oblivion and worth staying away from at least until Chairman and CEO are gone.

Until then, one of the clearest shorts on the market

Fredrik von Oberhausen said...

Hi Hmmmm!

I know why these guys were cheap because I hardly saw any customers in their stores but strangely enough Germans never seem to completely lose touch with the brand.

My background thought were that now with Hallhuber they could focus that brand on younger women and go full out towards elderly women with the Gerry Weber brand. With that I mean using elderly models in commercials as well as on pictures in the stores which they love to have from what I have seen.
They also need to expand their in store fashion shows giving a small snack and a glass of sekt to get those elderly women to come there and bring them with buses from retirement homes if need be!
They also need to change their poor hiphop/rap music selections in the stores to conceptual music that will enhance the shopping experience for elderly women. I am not old but I get stressed by their shitty radio station that whichever employee decided to pick for the day.

So yes I know what you mean when you say that they have no concept and I have of course as the unpleasant shareholder that I am been in touch with the IR and complained on them and yes, it is awful but I did feed them with suggestions and that is how annoying I am as a owner. Will it be accepted and considered? I doubt it but it is always worth a shot.

At least I hope that they did not appear to be crooks when you met them because another crook management I could really do without.

The family is sitting with plenty of shares which means their interest is long term with the company. Right now they seem to have lost their footing and you could be correct when you say that Ralf(?) is not the correct person to run with his daddy still sitting their with all that shareholder control... but I give people more than nine months before I judge them on their performance and yes the start has been awful for Ralf(?).

I am glad that someone is making money on Gerry Weber so keep shorting them. I will keep observing their stores for any changes not only in terms of concept but also in customer flow.

You are correct though. Already when I bought this company I had doubts and there I must really ask myself... why buy a company when you have doubts when there are so many other companies of interest that I have no doubt about? So I agree that it was a stupid investment.

hmmm said...

They have decided to reposition the brand to under 30 from over 60. Very amusing that all their presentations are full of leggy young women when this clearly isn't their customer.

What's wrong with targeting the older woman and why skip the 50's and 40;s, they have the most disposable income and therefore gravitate slightly towards quality.

unfortunately the business model is completely broken and subscale in a fashion world which punishes this.

There may be short up-turns but I will strongly suggest you re-think whether you trust these guys with your money because people do not change and the people you bet on made and believe in this ridiculous strategy.

Fredrik von Oberhausen said...

I do not fully agree with you. Yes their own produced Taifun brand is to young women below 30 as well as Hallhuber but the Gerry Weber brand (that corresponded to around 60 to 70% of their sales) are still directed towards 40+ women. Part of their problem is probably that they are trying to sell the Taifun brand in their Gerry Weber stores and they should take out that brand from the stores and put it into the Hallhuber stores instead... or completely drop it now that they have Hallhuber.

I fully agree with you that the the elderly women have plenty of dough and they need to spend it somewhere so why not at Gerry Weber. I think part of the concept will also be to get those women to start changing their wardrobe more frequently. A young person do that automatically because they grow, they study, they join sub-groups in society, they follow fashion bloggers, they start working and realise they need to buy completely new cloths etc.

Elderly women are more fixed in their ways... so ads with elderly women going to a grandchild's birthday in their newly bought Gerry Weber dress after cleaning out their entire wardrobe etc. that would be good stuff.

Almost sounds as if I would like to start working with ads and brands but I am sure that I would not be successful.

I believe that if Ralf does not make it then daddy will toss him out and a new CEO will arrive. I hope that it will be an elderly professional woman because I am sure she would be able to sort it out purely based on gut-feeling for what she would like to see and have herself. As an example I would have tried to steal (headhunted) Christina Ståhl from MQ in Sweden. That woman knows how to get a business running.

I will give Gerry Weber more time but I will not increase my investment.

Thanks for the feedback!