Analysis of Gerry Weber 2016

Company: Gerry Weber 

ISIN DE0003304101 | WKN 330410 

Business: A German fashion retail and accessories company. They currently have four brands for women: Gerry Weber, Taifun, Samoon and (the new addition by acquisition) Hallhuber. Underneath the Gerry Weber brand they have an additional two brands (Gerry Weber Edition and G.W.). They run their own stores but also franchise as well as online and sale of their brands in department stores. 

Active: In over 62 countries. They themselves are running 1000 stores (219 from Hallhuber) 

P/E: 7.7

Here you can find the previous analysis of Gerry Weber 2015. 

The for Gerry Weber is excellent with 7.7 and the P/B is also great with 1.1 which gives a very clear buy from Graham. The earnings to sales are so, so with only 8% but the ROE is ok with almost 15%. the book to debt ratio is excellent with 1.1.
In the last five years they have had an excellent yearly revenue growth rate of 5.5% which then gives us a motivated P/E of 16 to 19 which means that Gerry Weber is today undervalued by the market.
They pay a good dividend in the size of 3.4% which correspond to 26% of their earnings so after the dividend cut it now looks fine again.

Conclusion: Graham says yes to Gerry Weber and I... based on the figures would also say yes but based on what I see in the stores I decide to say no. So even though the P/E, P/B, ROE as well as dividend are all very good I now turn them down. I will remain as a shareholder and once I see the turn around coming then I might consider increasing my shares but these days I neither see that physically in the stores (with plenty of customers) nor do I see it in the financial statements.

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