Etam Iger'S Profit Increased 26% In The First Half Of The Year, And China'S Business Suffered Losses.

Underwear and clothing retailer ETAM D veloppement SCA (TAM.PA) announced net profit of 11 million 100 thousand euros in the first half of June 30th, up 26.1% from 8 million 800 thousand euros a year earlier.

Driven by European business, operating profit in the first half of the year rose 23.9% to 22 million 800 thousand euros, compared with 18 million 400 thousand euros a year earlier.

Core profit EBITDA recorded a 29.7% decline in sales during the Chinese New Year and less than cost promotion over the past quarter, down from 41 million 100 thousand euros to 28 million 900 thousand euros last year.

Gross margins also shrank by 100 basis points to 57.7%.

Sales figures for the first half of the year have been disclosed: total sales amounted to 598 million 400 thousand euros, and the comparable growth rates of real growth rate and constant exchange rate were 0.3% and 1.6% respectively.

European sales increased by 7% to 411 million 700 thousand euros, a 4.8% increase at a constant exchange rate, and China's sales shrank by 11.9% to 186 million 800 thousand euros, compared with a 6.1% decline at a constant exchange rate.

Business realized operating profit of 23 million 700 thousand euros, an annual increase of 30.9%, but China's business suffered a loss of 900 thousand euros, compared with the operating profit of 200 thousand euros in the same period last year.

The group noted encouraging signs of China's two quarter performance as the business reform plan began to work together in the first quarter.

To revitalize China's business, ETAM D veloppement SCA (TAM.PA) hired Jacques Marsal, chief operating officer of Hongkong Office of Alvarez & Marsal ORM consulting company as China's consultant at the beginning of the year.

In addition, the group hopes to speed up the clearance of commodity inventory in the past quarter, reduce personnel costs and make regional adjustments to the marketing structure so as to achieve the goal of stopping the decline of China's revenue in 2014.

Retail network, product supply and sales channel are also the main points of China's business reform.

The group plans to close 200 sales counters, which have closed 88 in the first half, while opening independent stores in the shopping center, designing products in Europe and America, and distributing underwear series on a larger scale; and strengthening the development of online sales to further increase the sales proportion of the channel at present by 28%.

At the end of the first half of the year, the group had 4246 stores worldwide, 940 and 3083 in Europe and China, and 223 in international franchisees.

In addition, the group will enter the field of beauty products. Since October, it has been putting on make-up and other beauty products in Etam underwear stores.