The Group announces the forthcoming arrival of Nicolas Marchand as Chief Executive Officier

After 16 years at the helm of Damartex, Patrick Seghin has announced his intention to leave the Group to take up non-executive positions. He will remain with Damartex until 31 March 2025 to ensure an effective transition to his successor, Nicolas Marchand, who will join the Group on 1 January 2025 and will take up his post as Chairman of the Executive Board on 17 February 2025.

With solid experience in steering and managing companies in a variety of sectors, Nicolas Marchand has held a number of key positions at McKinsey, BNP Paribas Fortis, VOO, a Belgian internet and telephony operator, and more recently Trafic, where he was Managing Director. Nicolas helped to define the new strategic roadmap for Trafic, a Belgian non-food retailer also present in France and Luxembourg, and supported the company’s transformation and growth.

‘I am delighted that Nicolas Marchand has joined Damartex as CEO. His varied experience and ability to grasp the challenges of multiple sectors and adapt to the different markets in which our Group operates are undeniable assets. I would also like to extend my warmest thanks to Patrick Seghin for his unwavering commitment to Damartex, for his leadership and for his contribution to the company’s development and transformation since 2008,’ says Jean Guillaume Despature, Chairman of the Supervisory Board.

‘I’m very honoured to have been given this opportunity to contribute to the development of the Damartex group. I’m joining a meaningful company with a rich history, strong values and solid fundamentals. I’m looking forward to meeting the teams and writing the next pages of the adventure with them’, says Nicolas Marchand, future CEO of Damartex Group.

‘After more than 16 years at the helm of the Damartex Group, I would like to express my deepest gratitude to all my colleagues, to the Supervisory Board and to our historic shareholder, who have never ceased to place their trust in me. I’m proud to have been able to contribute to the development of a bold, unique French company that is now recognised beyond our borders,’ adds Patrick Seghin, Chairman of the Management Board of the Damartex Group.

By integrating CSR at the heart of its “Dare Act Impact 2026” strategy, the Damartex Group reaffirms its ambition to guarantee its profitability and sustainability, while strengthening its social, environmental and societal utility through its “On Seniors’ Side” commitment. The Extra-Financial Performance Statement for the 2023-2024 financial year illustrates the concrete actions taken this year to achieve these objectives.

Our CSR strategy, Change Our World, is based on concrete ESG criteria. This policy is a compass guiding our strategic decisions, with a clear ambition, to actively contribute to the ecological and social transition around our four main commitments:

1. Reducing our environmental impact
2. Promoting human capital
3. Ethical business conduct
4. To be a committed corporate citizen, particularly in favour of seniors.

This year, despite an unstable context, we have stepped up our action in several areas. We measured our CO2eq emissions for the third time and continued our efforts to reduce our carbon footprint by 25% by 2026. The design of more responsible products is progressing, with 33% of our collections now meeting sustainable criteria. We have also stepped up our ethics efforts, towards our ambition of 80% of products brought to market from audited factories by 2026. At the same time, we continued to promote the well-being and development of our employees. Finally, our On Seniors’ Side Foundation continues its actions in favor of seniors, by supporting solidarity projects and strengthening its societal commitment.

These results, achieved with and for our stakeholders, demonstrate our collective commitment to fundamentally transform our business model. It is with sincerity, pride and humility that we share these advances, while recognizing that the road to a sustainable future is still long.

A growing first quarter illustrating the Group’s commercial responsiveness

In the 1st quarter of the 2024/2025 financial year, the Damartex group posted revenue of €109.9 Mn, up +0.6% at actual exchange rates compared to the 1st quarter of 2023/2024 (+0.1% at like for like exchange rates).

This demonstrates the Group’s ability to be responsive and entrepreneurial, operating effectively in a constrained environment while taking advantage of more favourable commercial opportunities.

The rigorous operational management put in place last year as part of the strategic plan thus bore fruit in this quarter.

The Fashion division recorded sales of €82.5 Mn in the 1st quarter, up +1.6% at actual exchange rates (+1.1% at like for like exchange rates). With a particularly dynamic month of September for the textile market, Damart closed the first quarter with growth of +0.7% (+0.2% at like for like exchange rates). Over the period, the Xandres brand confirmed a solid performance with sales up +7.8% at real and like for like exchange rates.

The Home & Lifestyle division’s sales amounted to €19.3 Mn in
the first quarter, down -3.4% at actual exchange rates (-4.1% at like for like exchange rates). 3Pagen has been operating for several months in a market particularly impacted by the contraction of the German economy, and posted a decline in activity of -9.8% at real exchange rates. While Vitrine Magique ended the quarter slightly down -1.6% at real exchange rates, Coopers of Stortford reversed the trend of previous quarters with sales up +3.0% at real exchange rates (+1.3% at like for like exchange rates).

Finally, the Healthcare division recorded sales of €8.1 Mn in the quarter, up +0.3% at real and like for like exchange rates. The plan to stop the catalogue sales activity of home care accessories of the Almadia brand has been confirmed and will be effective at the end of the current half-year. This will enable the brand to concentrate its efforts on the pharmacy and service point channels. Restated for this activity, the division’s sales growth was driven by all brands. Santéol and MSanté continued to perform well with sales growth of +10.4% and +4.4% respectively.

Prospects

The Group’s business momentum during the quarter, the result of meticulous and rigorous management work, confirms the relevance of the operational and structural choices made as part of its Dare. Act. Impact 2026 strategic plan.

Aware that the macroeconomic environment still calls for caution, Damartex is pursuing with agility, responsiveness and determination the deployment of the second chapter of its plan, in order to ensure the sustainable development and performance of the Group’s activities.

At the end of Chapter 1 of its strategic plan, Damartex increases its operational profitability

PERFORMANCE BY POLE

Damartex ended the 2023/24 financial year with sales of €529.2 Mn, down compared to the previous year (-9.9% at actual exchange rates, -10.2% at like for like exchange rates). This reflects activity impacted by headwinds (macroeconomic instability and contraction in consumption), but also more targeted business investments.

The “Fashion” division’s revenue amounted  to €396.2 Mn for the 2023/2024 financial year, down -9.0% at actual exchange rates. While the Damart brand posted a decline in turnover, reflecting the evolution of its business model (decline in mail order, growth in market places and digital), the Xandres brand continues to demonstrate its potential with performances that are still strong (+6.8%).

The EBITDA of the Fashion division was €8.1 Mn, reflecting the solid fundamentals of Damart and the good performance of Xandres.

The “Home & Lifestyle” division recorded sales of €99.2 Mn, down -10.6% at actual exchange rates. The Group has significantly restructured the division’s business model to meet the challenges of a generally degraded market and changes in the sector.

EBITDA improved by more than €8 Mn compared to last year to end at -€0.4 Mn.

The “Healthcare” division posted sales of €33.7 Mn, down -17.9% at actual exchange rates.

Santéol and MSanté are performing well, in line with their ambitions. On the other hand, catalogue sales of Almadia brand’s home care accessories underperformed. As such, the Group is studying the project to discontinue this channel and a reorganization of the brand to focus its efforts on the pharmacy and service point channels.

EBITDA for the Healthcare division was €1.9 Mn, negatively impacted by
€2.7 Mn by the mail order business of the Almadia brand. MSanté and Santéol are growing in terms of rates and volume.

FINANCIAL RESULTS

Damartex’s operating EBITDA improved to €9.6 Mn, compared with €4.4 Mn last year, reflecting the adjustment of its activities and the fine management of its costs towards greater profitability.

The Group has implemented operational decisions and cost flexibilization measures that are already bearing fruit.

Damartex closed the 2023/24 financial year with a net profit of -€36.0 Mn, mainly impacted by non-recurring events such as the sale of Afibel and the restructuring undertaken within the Group, as well as by interest costs related to the financing finalized in August 2023.

FINANCIAL POSITION

The net financial position stood at -€104.7 Mn at the end of June 2024 (compared to -€81.9 Mn at the end of June 2023), taking into account the increase in the cost of financing, the above-mentioned exceptional transactions and the continued investments necessary for the Group’s transformation.

 Working capital requirements stood at €24.8 Mn at the end of June 2024, a sharp improvement compared to the previous year. This result, the result of the efforts made by the teams, reflects the Group’s agility, particularly with regard to the sharp reduction of €25 Mn in inventories.

DIVIDEND

Due to a still difficult market environment, the Management Board will not propose a dividend distribution at the Annual General Meeting scheduled for November 21, 2024.

PROSPECTS

Still fully committed to its ambition to be a European reference in the Silver Economy, Damartex is engaging in Chapter 2 of its Dare.Act.Impact 2026 strategic plan, structured around four major complementary axes.

• Delivering Financial Performance: The 2023/2024 financial year was devoted to the implementation of a large number of restructuring actions with the aim of improving the operating profitability of each of the divisions. The ambition for 2024/2025 is to reap all the benefits of these restructurings and to accelerate the evolution of business models.

• Innovative Brand Experience  : Priority focus for the 2024/2025 financial year. Across its three divisions, the Group will focus its investments on developing the image and influence of its brands to create a resolutely innovative customer-patient experience.

• Change Our World: Aware of its societal role, Damartex is accelerating its current momentum to achieve the ambition of reducing the carbon footprint by 25% by 2026.

• Shared Leadership : The year 2023/2024 has laid the foundations for a different kind of leadership, focused on autonomy and shared responsibility. The ambition for 2024/2025 is to continue the deployment of this innovative leadership to enable Damartex to be more adaptable.

“One year after the launch of its new strategic plan, the Damartex group has been able to make operational/structural choices and lay the foundations for its sustainable transformation, focused on a return to profitability. With the learning from the exercise, we are approaching the second chapter dedicated to the sustainable development of our activities with confidence and determination,” says Patrick Seghin, CEO of the Damartex group.

Damartex is pursuing its strategic course and agile management of its activities to achieve a successful turnaround

Damartex closed the 2023/2024 financial year with revenue of €529.2 Mn, down on the previous year (-9.9% at actual exchange rates, -10.2% at constant exchange rates). Continuing the trend of the first six months, second-half sales came to €236.3 Mn, down -7.7% at actual exchange rates (-8.4% at like for like exchange rates). This reflects both a business impacted by headwinds – macroeconomic and political instability and contraction in consumption – but also more targeted commercial investments.

The fourth quarter was particularly constrained for the Fashion and Healthcare divisions, while sales in the Home & Lifestyle division tended to stabilise. Damartex closed its final quarter with revenue of €105.3 Mn, down -10.4% at actual exchange rates (-10.9% at like for like exchange rates).

The “Fashion” division posted revenue of €396.2 Mn for the 2023/2024 financial year, down -9.0% at actual exchange rates (-9.3% at like for like exchange rates). With sales down -10.2% at actual exchange rates, the Damart brand was penalised by a drop in consumption, in particular due to poor weather conditions in the last quarter impacting the entire textile sector. The Xandres brand continued to prove its potential and the relevance of its positioning, with sales up +6.8% at actual exchange rates for the year as a whole.

The “Home & Lifestyle” sales for the year came to €99.2 Mn, down -10.6% at actual exchange rates (-11.1% at like for like exchange rates). While the 3Pagen brand is holding steady, Coopers of Stortford’s activity is down, in a context of persistent economic and political tensions in the English market. The Group has significantly restructured the division’s business model to meet the challenges of a generally degraded market and changes in the sector.

Finally, Healthcare  revenue  was €33.7 Mn, down -17.9% at actual exchange rates and -18.0% at like for like exchange rates. Santéol, a home healthcare provider specialising in respiratory assistance, closed a very dynamic financial year with revenue up +9.0% at actual exchange rates compared to the previous year. In addition, the division was particularly impacted by the underperformance of catalogue sales of homecare accessories under the Almadia brand. Faced with this challenge, the Group is looking into the possibility of discontinuing catalogue sales and reorganising the brand to focus its investments on the pharmacy and point-of-service channels.

Prospects

In a market environment that is still turbulent and given the many economic uncertainties, Damartex is maintaining rigorous cash management and careful and prudent management of its activities. While the Group continues to work on improving its operating profitability, it nevertheless expects a net profit for the year impacted in particular by exceptional items.

At its annual results presentation on September 11, 2024, Damartex will unveil the second part of its Dare.Act.Impact 2026 plan.

Damartex continues to implement its strategic plan with determination

Despite sales of €292.9 million in the first half of 2023/2024, down 11.6% on the same period last year, Damartex is determined to stay the course by optimizing its fixed and variable costs, and actively managing its cash flow and working capital requirements.

Focused on customer satisfaction, the Group continues to invest in its growth and value creation objectives, and in an environment that remains uncertain, is beginning to see the fruits of its efforts.

Damartex continues to roll out its strategic plan with determination

BUSINESS

Damartex ended the first half of the 2023/2024 financial year with sales of €292.9 Mn, down on last year (-11.6% at actual and like-for-like exchange rates).

Sales for the Fashion division came to €226.7 Mn for the first half, down ‑9.9% at actual and like-for-like exchange rates, reflecting the impact of the deteriorated environment, despite another good performance from the Xandres brand (up +13.2% year-on-year).

The Home & Lifestyle division posted sales of €49.4 Mn, down -14.8% at actual and like-for-like exchange rates. This performance is currently being impacted by a commercial investment policy which is giving priority to a return to profitability, and by a market which is in decline as a result of a different trade-off in household consumption.

Finally, the Healthcare division ended the half-year with sales of
€16.8 Mn, down 22.4% at actual and like-for-like exchange rates. This figure reflects a mixed performance, with growth in the Home Healthcare sector (Santéol up +7.5% and MSanté up +3.1%) and a sharp fall in the Age-in-place sector (mainly due to a transition period dedicated to operational integration within the new Almadia entity).

DARE.ACT.IMPACT.2026 STRATEGIC PLAN
RESULTS

In an economic environment that remains unfavourable, the priority for the first half of the year was the implementation of the four-pronged DARE.ACT.IMACT.2026 plan.

Delivering financial performance:
Significant initial progress has been made in this area, with the aim of returning the business to profitability:

• Significant reduction in fixed costs with the implementation of the restructuring plan announced in September, which is already generating savings of €6 Mn on an annual basis ;
• Proactive management of inventories, both upstream (procurement) and downstream (clearing), resulting in a €20.4 Mn reduction over the first six months of the year ; and
• Optimization of marketing efficiency, thanks to better-targeted spending, resulting in a €12 Mn reduction over the half-year and an improvement in ROI.

The Group’s operating EBITDA came to €4.9 Mn, against €11.6 Mn last year, mainly as a result of the fall in business over the period.
Operating EBITDA was €6.8 Mn for the Fashion division, €-2.1 Mn for the Home & Lifestyle division and
€ 0.1 Mn for the Healthcare division.
Damartex closed the half-year with a net loss from continuing operations of €-12.7 Mn, against €1.4 Mn for the 1^st half of 2022/2023.

Innovative brand experience:
Damartex is pursuing its objective of modernizing the image of its brands and improving the customer experience. The effectiveness of its investments is already being felt, as demonstrated by the significant rise in its NPS from 34.9 in Autumn-Winter 2022 to 48.5 in Autumn-Winter 2023.
In addition, the hybridization of the business model is continuing, with sales on marketplaces up +14.4% to €4.8 Mn in the first half.

Change Our World:
At the core of our business model, the Group is accelerating its CSR commitments, with significant progress in the proportion of products with a limited impact*, which, for the Fashion division, rose from 21.9% in SS23 to 37.2% in AW23.

Shared Leadership:
In line with its values and its transformation culture based on trust and responsibility, the Group has launched the Leadership Development Programme, which has already reached 30% of the Executive Leadership Team.

FINANCIAL POSITION

The net financial position was €-90.7 Mn as of the end of December 2023 (compared with €-81.9 Mn at the end of June 2023), reflecting the Group’s investments and its effective, reinforced management of inventories to adapt flexibly to changes in demand.

Working capital requirements stood at €33.3 Mn at the end of December 2023, compared with €40.6 Mn last year.

In line with its intention to focus its efforts and investments on a more limited number of brands, the Group has sold Afibel, its plus-size fashion brand.

OUTLOOK

Damartex is determined to continue optimizing its fixed and variable costs and actively managing its cash flow and working capital requirements.

Focused on customer satisfaction, the Group is continuing to invest in its growth and value creation objectives and, in an environment that remains uncertain, is beginning to see the fruits of its efforts.

* For the Fashion division, a product is considered to have a limited impact if it contains at least 30% more sustainable or labelled fibres, if its manufacturing process is more resource-efficient, or if it is produced in a European country with a low-carbon energy mix.

Damartex announced today that it has signed an agreement to sell Afibel, its Golden Age brand and pioneer in plus-size fashion, to CTFI, a group specializing in the manufacture and distribution of personal and household goods.

This sale is part of the new strategic plan of the Group: Dare. Act. Impact. 2026, announced in September 2023, to enable the Group to focus its efforts and investments on a more limited number of brands.

The transaction, which preserves jobs at the Villeneuve d’Ascq site, was subject to the usual consultation procedures with employee representative bodies, and was approved by the Lille Métropole Commercial Court on February 14, 2024.

Messrs COHEN commented: “The CTFI Group is delighted to have finalized the acquisition of Afibel, a major player in ready-to-wear home shopping. With the support of the seller Damartex, this acquisition will enable CTFI to expand its brand portfolio. Synergies with the group’s other companies will offer new opportunities for growth and development, while maintaining our commitment to excellence and customer satisfaction. Groupe CTFI is delighted with this strategic acquisition and looks forward to working with Christine Bocquet, Afibel’s Managing Director, and all the company’s employees.”

Patrick Seghin, Chairman of the Damartex Board of Management, added: “The sale of Afibel is an important step towards our objective of refocusing the portfolio to which we are committed as part of our new roadmap, and represents an opportunity for the brand to pursue its development while benefiting from the expertise of CTFI’s teams.  This transaction also demonstrates the Group’s active and rigorous management in implementing its strategic orientations aimed at delivering on its financial commitments”.

Business in Line with Previous Quarters, First Steps in Rolling Out the New Strategic Plan

Damartex closed the first half of the 2023/2024 financial year with sales of €292.9 Mn, down -11.6% on the previous year at like-for-like and actual exchange rates. Against a resolutely unstable backdrop of persistently high inflation, declining purchasing power for both households and businesses, and weak economic growth, second-quarter sales came to €183.6 Mn, down -13.3% at like-for-like and actual exchange rates. The UK market in particular continued to slow down significantly, impacting the Group’s brands in this region.

In a declining market undergoing radical transformation, the Fashion division posted sales of € 226.7 Mn for the first half, down -9.9% at both actual and like-for-like exchange rates. Second-quarter sales were down -12.3% at actual exchange rates (-12.4% at like-for-like exchange rates).

The Damart brand reported a -13.1% fall in sales for the quarter at like-for-like and actual exchange rates compared with the same period last year. This trend is explained by the fall in footfall, as observed in the apparel market.

Xandres, positioned as an “affordable luxury” brand, once again put in a fine performance in the quarter, with sales up +9.0% at actual and like-for-like exchange rates.

The Home & Lifestyle division, impacted by a sector suffering from a loss of confidence and household budget cuts, ended the quarter with sales of €29.4 Mn, down -16.8% at actual exchange rates (down -16.9% at like-for-like exchange rates). Sales at 3Pagen and Coopers of Stortford, which are sensitive to the economic climate, ended the second quarter with sales down by -16.3% and -17.3% respectively at actual exchange rates.

The Healthcare division, which includes Almadia, Santéol and MSanté, posted second-quarter sales of €8.8 Mn, down -16.3% at both actual and like-for-like exchange rates, despite a good performance from the service business of the Santéol and MSanté banners, respectively up +15.5% and +15.8% at actual exchange rates. In line with the first quarter of the year, the division is temporarily impacted by the ongoing operational integration within Almadia, the new entity, resulting from the recent merger of the Sédagyl and Médical Santé brands.

In a market environment that is still uncertain and economic activity marked by a decline in household consumption, Damartex is continuing its tactical steering to adjust its level of activity to the macroeconomic context and is continuing to focus its efforts on rolling out its new Dare. Act. Impact 2026 strategic plan.

The Group is sticking to its commitments and continuing to manage its business with commercial agility and caution, both in terms of expenditure and cash flow.